"When
a government is dependent upon bankers for
money, they and not the leaders of the government
control the situation, since the hand that
gives is above the hand that takes. Money
has no motherland. Financiers are without
patriotism and without decency. Their sole
object is gain." ~ Napoleon Bonaparte

"For
a national currency to also be a reserve currency
requires a country to experience a current
account deficit, which over the long run undermines
confidence in the currency. Ignoring the dilemma
does not solve it." ~ Robert Triffin (economist)

"The
crisis not seen by Fed observers is the true
balance sheet condition of the losses on the
trillions of dollar of worthless paper fraudulent
paper because numbers are given but no independent
mark to market audit has been or is likely
performed. As QE3 to Infinity moves ahead,
the balance sheet of the Federal Reserve continues
to acquire worthless paper in exchange for
dollars. Junk moved onto the balance sheet
of the US Federal Reserve as the common share
of USA Inc (the US dollar) continues to expand
exponentially. The end game problem is an
extended recessionary business conditions
going into 2015 to 2017, wherein the supply
of dollars continually expands, the US Federal
Deficit grows, US state deficit spending continues
to grow, and the quality of the Federal Reserve
balance sheet proceeds to deteriorate further." ~ Jim Sinclair

"Without
further reform of Money Market Funds, our
financial system will remain vulnerable to
runs and instability, which are harmful for
retail and institutional investors, businesses
that need a reliable source of funding, the
MMF industry, and the financial system as
a whole. We will seek broad input from the
full range of stakeholders on how best to
design further reforms." ~ Timothy Geithner
(who will not return in 2013, regardless)

"The
1901 [Bull market] was a speculative demonstration
based on the assumption that we were living
in a new era; that the old rules and principles
and precedent of finance were obsolete; that
things could safely be done today which had
been dangerous or impossible in the past.
The illusion seized on the public mind in
1901 quite as firmly as it did in 1929. It
differed only in the fact that there were
no college professors in 1901 who preached
the popular illusion as their new political
economy."
~ Alexander Dana Noyes (1930, history repeats)

"The
United States has not dealt
with any of the nation's fundamental problems." ~ Mort Zuckerman (CEO of Boston Properties)

"It
is not just the fiscal cliff; it is the fiscal
abyss." ~ David Walker (former Comptroller
General of USGovt and current CEO of the Comeback
America Initiative)

◄$$$
THE UNITED STATES PRESENCE IS GRADUALLY BEING
REMOVED FROM IRAQ, EITHER BY INVITATION
OR BY CONTRACT BOOT. RUSSIAN FIRMS ARE BEING
INVITED TO EXPAND. THE AMERICAN VENTURES TO
COURT KURDISTAN HAVE RESULTED IN RETALIATION
BY BAGHDAD LEADERS. THE RUSSIANS HAVE CLOSED A BIG
$4.2 BILLION ARMS DEAL WITH IRAQ. THE COLD WAR HAS RETURNED.
$$$

The
anti-US progression is happening quite rapidly,
as the blow-back effect begins to work. The
reality is that $trillions were wasted, the
final chapter being ultimately thrown out
of Iraq.
Bombings in and around the Baghdad
capital have returned, or really never ended.
So much for nation building.Iraq wants Russian companies to replace
Exxon at the West Qurna
oilfield, a major insult. The decision appears
to be in retaliation for the US making important
gestures by venturing into Kurdistan,
which angered the feisty Baghdad
leaders. The northern Kurdish region has signed
deals with major foreign oil firms, such as
Exxon, Total, and Chevron. Sources state that
GazpromNeft has no plans to halt
its projects in Kurdistan,
which it pledged to develop in August. The
company already has a project in Iraq, located near the Iranian border.

Iraq
in response is considering a decision to replace
Exxon with Russian Lukoil
and GazpromNeft,
both of which are already involved in the
country. A spokesman for Lukoil denies
the expansion plans, reiterating the official
line that it is satisfied with its portfolio
in Iraq.
Sources have told Reuters that the Russian
top oil company Rosneft
might join with Exxon in Iraq,
following a landmark agreement struck to jointly
tap Arctic hydro-carbon riches and oil &
gas in North America.
President Putin called for Russia
to strengthen its presence in the OPEC oil
producer state at a meeting with al-Maliki. See the Reuters article (CLICK HERE).
Expect a lot of jockeying for position with
Iraq,
the bone of contention being Kurdistan.

The
Iraqi stage has a military component, which
should be equally shocking for a US rebuff. The Iraqi Govt
has signed a deal to buy $4.2 billion in Russian
weapons. The hapless hostile US State
Dept says it is not concerned by the deal.
The USGovt cites 467 newly initiated military
hardware sale contracts with the United States. If completed, they will be worth
over $12.3 billion. Disclosed in a Russian
Govt document issued
at a meeting between Prime Minister Dmitry
Medvedev and Iraqi Prime Minister Nuri
al-Maliki, the deal
provides Russia
a big boost at a time when its arms sales
to Libya
and Syria
suddenly have turned uncertain. Russia
lost about $4 billion in arms deals with Libya due to the fall of Qaddafi and his disemboweling
in a culvert. Iraq
had been off limits for Russia's
defense industry after the US
invasion of 2003 which ousted Saddam Hussein.
The old Iraq had been one of the Kremlin's
biggest weapons customers. The contracts
will help Russia
maintain its position as the world's second
biggest arms seller after the United States. Regard
the Cold War as returning, part of the blow-back
effect. See the Reuters article (CLICK HERE).

◄$$$
MEXICO
HAS INSTITUTED HARSHER CAPITAL CONTROLS, AS
LARGE CASH TRANSACTIONS ARE BANNED. MEXICO
AS A NATION SERVES AS A PRINCIPAL DRUG SUPPLIER
TO THE UNITED STATES. THE FOREMOST IS THE
CENTRAL INTELLIGENCE AGENCY THROUGH THE AFGHAN
SUPPLY ROUTES. $$$

Outgoing
Mexican President Felipe Calderon has signed
into law a ban on large cash transactions.
The ban will take effect in about 90 days
and it is part of a broader effort to control
monetary flows. Under the law, a specialized
task force within the nation's top legal prosecution
office will investigate financial operations
related to resources of unknown origin. For
real estate transactions, cash payments of
more than a half million Pesos (=US$38,750)
will be forbidden. For automobiles or items
like jewelry, art, and lottery tickets, cash
payments of more than 200,000 Pesos (=US$15,500)
will be forbidden. The law carries a minimum
penalty of five years in prison. The new law
extends the laws put into enforcement in 2010.
At that time, Mexico instituted strict limits on foreign exchange
cash transactions to $1500 per person per
month. The effect was felt on tourism, perhaps
a desired change since internal drug cartel
violence has ramped up severely in Mexico. Tens of thousands of drug war murders
have occurred, many in public places and on
highways, the number minimized and downplayed.

The
USDollars in flow
are a huge portion of the actual paper cash
that this effort is aimed at. The Mexican
Peso is the 12th most traded currency in the
world, but has a clear lead as the most traded
currency in Latin America.
Reuters reported that, "Sales of drugs
from marijuana to cocaine and methamphetamine
in the United States are worth about $60 billion annually,
according to the United Nations. About half
of that amount is estimated to find its way
back to cartels in Mexico." The reports always overlook
the CIA narcotics flow from Afghan sources,
which account for 70% of all US
domestic supply. That figure was a mere 7%
before 911. Payment systems are well hidden
for the New
York banks through Mexican financial institutions.

Two
years in the making, the new law in Mexico requires notaries, real estate brokers,
and other dealers to report the forms of payment
for transactions above stated limits. Financial
institutions will be required to report monthly
credit card balances in excess of 50,000 Pesos
(=US$3875). Witness the global trend among
governments to control money, otherwise called
capital controls.Mexico has a long way to go
to catch up. Spain
recently banned cash transactions above 2500
Euros and Italy banned cash transactions
above 1000 Euros. Watch France impose strictures next. See the Forbes
article (CLICK HERE).
Seizures like the $207 million shown below
are motive to remove a few police officials
or key investigators by the drug cartels operating
inside Mexico.

◄$$$
YET ANOTHER EXECUTIVE ORDER PERMITS THE CONFISCATION
OF PERSONAL BANK ACCOUNTS. THE CURRENT PRESIDENT
OBAMA HAS ISSUED 923 SUCH ORDERS, FOUR TIMES
AS MANY EXECUTIVE ORDERS AS THE YOUNG BUSH,
WHO ISSUED HIS FASCIST ORDERS OVER EIGHT YEARS.
THE GROUNDWORK FOR THE FASCIST
STATE AND MARTIAL
LAW IS PREPARED. $$$

Recent
imperial pronouncements by Obama give the
USGovt the right to kill citizens on order,
to arrest citizens without charges or due
process, to confiscate citizen assets without
cause, and to force citizens into no wage
(slave) labor camps. In early October, President
Obama signed yet another executive order that
specifies private bank accounts as targets
for seizure. The big banks require capital
to survive. They will use yours. The MFGlobal
and Peregrine Financial cases where private
accounts were stolen did not awaken the nation.
One must wonder if the nation can be awakened
to the fascist police state that is taking
shape. Perhaps so, but when
too late. See the New American article
(CLICK HERE)
and the White House press release (CLICK HERE).

◄$$$
CRONY CAPITALISM CORRUPTS FREE MARKETS. A
NICE NAME GIVEN TO THEFASCIST BUSINESS MODEL
THAT PERMITS AND ENCOURAGES FINANCIAL FRAUD
IN THE $TRILLIONS (WITH 12 ZEROS). THE
INEFFICIENCY AND CRIMINALITY WORK TO DESTROY
THE NATION. $$$

Former
Reagan Admin budget director David Stockman
is living in the fast but dangerous lane.
He regularly provides information on the broken
USGovt finances. But Stockman has taken
a new tack to criticize USFed
Chairman Bernanke for lunatic monetary policy.
He criticizes the chairman for believing that
hyper-active usage of the printing press to
create new money can be done without destructive
consequences. He calls Bernanke the most
dangerous man in the nation, saying "The
Fed is being run by the singlemost dangerous man ever to hold high office in the history
of the United
States." He
offers the opinion that Bernanke is more dangerous
than Geithner, Greenspan, Summers, and
Hank Paulson all put together. When hearing
crony capitalism, think Fascist Business Model.
The cronies are the criminals given free rein
for bond fraud, bond counterfeit, mortgage
fraud, insider trading, obstruction of justice,
and narcotics money laundering. The big banks
have merged with the state, the definition
of fascism. The lack of efficiency works with
the criminal impunity to create a whirlwind
of destructive forces. Not 5% of Americans
can even define fascism, yet alone identify
it. See the Zero Hedge article with Stockman
speech video (CLICK HERE).

◄$$$
ATTACKS DIRECTED AGAINST VARIOUS GROUPS ARE
ON THE RISE, IN DEFENSE OF THE FASCIST STATE. THE TARGETED GROUPS ARE LED BY THOSE ADVOCATING CONFORMITY TO
THE CONSTITUTION. $$$

The
law enforcement apparatus for the US nation is fast becoming a toolbox for the fascist
leadership to defend their reign, ranks, and
fortresses. Conforming to the Constitution
has turned into a
indictment against its advocates. The
cases like the domestic phone call gone amok
will be commonplace soon. See the Intel Hub
article (CLICK HERE).
What many do not observe is that fascist state
violence appeals to the dark side of human
beings. The police forces find no difficulty
in recruiting men to beat heads with billy
clubs and to spray mace in faces of people
demonstrating against bankers or war. The
Intelligence agencies have no trouble recruiting
people given license to murder, the sociopaths
among society. Fascism appeals to that dark
side. Reporting on neighbor activities for
reward will be an easy next step. Snitching
on neighbors even when charges are false will
be common. Various groups will be soon declared
enemies of the state, like those who favor
the Constitution, civil liberties, truth on
911 events, even capitalism and prosecution
of banker crimes. The Syndicate dons have
already redefined patriotism. Their official
911 Commission reads like a primmer to Reich
Physics.

◄$$$
REVOLT OF THE SPOOKS HAS BEGUN, EMANATING
FROM THE SUPPRESSED FLOW OF INFORMATION ABOUT
RISING ISLAMIC COUNTER-INSURGENCY ACTIVITY.
FOCUS IS ON LIBYA, WHERE A CAREER DIPLOMATIC
WAS KILLED BY A MOB. ANGER OVER THE USGOVT
FOREIGN POLICY IS SPREADING. $$$

Intelligence
officials angered by Obama Admin have covered
up the available information held on insurgent
groups in Egypt
and Libya.
The administration faces mounting opposition
from within the ranks of US Intelligence agencies
over what career officers call a cover-up
of intel information about violent insurgency in North Africa. Data held back from senior officials and the public includes
numerous classified reports revealing jihadist
activity throughout the tumultuous North Africa
and Middle East region, as well as notably
widespread penetration into Egypt
and Libya.
These preparatory actions took place in the
months before the deadly September 11th terrorist
attack on the US
consulate in Benghazi
Libya. The insurgents seemed to commemorate the
911 attacks, falsely blamed on Arab groups.

The
intelligence officials pointed to the statement
issued in late September by the Office of
the Director of National Intelligence (ODNI)
that raised additional concern about the administration's
mishandling of intelligence. The attack began
spontaneously following protests at the US
embassy in Cairo,
which seem like fair warning, but ignored.
See the Ulsterman Report article (CLICK HERE)
and the Before Its News article (CLICK HERE).
The original statement from the White House
was some lame story about reaction to an anti-Moslem
film. The latest is the clowns at the US State
Dept deny that an anti-Islamic film was the
cause of the Libyan uprising against the US
Embassy. They even say that no such claim
was ever made. The last two US presidents seem equally
pitiful in mental preparedness for the job,
Obama a better public speaker, provided a
teleprompter is in place. Bush Jr was helped
along with a transmitter device located on
his back that showed clearly. The debate performance
proves that point very well.

◄$$$
BEWARE OF A POTENTIAL SUPER PLAN TO FORECLOSE
ON AMERICAN PEOPLE, IN AN IMPOSITION OF MARXIST
PRINCIPLES. THE HOUSING BUBBLE AND BUST PERMITS
A FORECLOSURE THAT REMOVES PRIVATE PROPERTY
RIGHTS, PUTS PROPERTY TITLE IN USGOVT HANDS,
WHILE CIVIL LIBERTIES VANISH. $$$

Lindsey
Williams is a former religious pastor for
the big oil firms, given the privilege of
hearing the Syndicate's important long-range
plans from remote locations where the dons
often met and shared thoughts openly. The
information is permitted leaks by the arrogant.
According to a story reported by Adrian Salbuchi,
it appears Williams was given an opportunity
to speak to a former CEO at Atlantic Richfield.
The plan is to conduct the marxist confiscation of private property, using the
USFed as the operator and bonds reeling off the press as the
purchase weapon. The hypothesized plan makes
sense. The many parts are in motion toward
such an objective. Keep in mind that the following
plan in steps is from Williams, taken from
a conversation with an oil executive.

Here
is what Lindsey Williams was told as for the
blueprint plan in steps.

1)Bernanke
was sent out by the banker syndicate to ramp
up the bond monetization without limit (QE
to Infinity) with a focus on mortgage bond
purchases. The goal is to dispossess Americans
of their homes, a process well along with
the spate of home foreclosures. Then the
USGovt tool in Fannie Mae will rent the homes
back to the public. Private property is to
be killed off, in keeping with the marxist principles. The source of funds to purchase
the homes, either directly from bank portfolios
or via mortgage bonds, is obviously thin air.
Wealth is to come from illusory sources, the
banker arrogance, and their printing press
under full control.

2)The
USFed will use the
mortgage bonds to enter the derivatives market,
geared at least to the fractional 10-fold,
maybe more. Chairman Bernanke so forewarned
in his speech explaining the details of QE3.
Few however contemplate what the plan is though
when hearing his Politburo words.

3)Banks
will use the proceeds from mortgage bond sales
to buy USTreasurys.
The QE3 really is USTBond
monetization, but with a handoff from banks
to assure the home titles are in the proper
hands. This is a paper game in movement.

4)The
USDollar from the
three steps will be placed in an accelerated
death spiral. A precise timetable for the
collapse was not revealed, if it exists. The
ex-CEO did not say. In order to prepare
the US
pubic for the solution on property rights,
a creeping hyper-inflation will be engineered
prior to collapse. The public has a long
history of accepting almost any lunatic or
deceptive or destructive solution when offered
during a crisis, almost without question.

5)Upon
the crippling fatal final chapter of the USDollar,
a new world currency is unveiled, to be backed
by Gold. However, in order to succeed from
a banking perspective, from a solvency foundation,
the Gold price must be at least $3000 per
ounce and the Silver price must be at least
$75 per ounce.

6)The
Syndicate expects the US
population to remain subdued, in shock, and
submissive. They are seen as indifferent,
apathetic, while on their backs, in reaction
to their own debt enslavement.

The
postulated plan offers details on the indirect
USFed monetization
of USTreasurys with some added twists
to secure property titles. One must permit suspicions to be aroused
for a large picture orchestration, as in multi-lateral
participation. The Chinese leased the Mao
era gold to Wall Street. The USGovt granted
Most Favored Nation status to China
in a prelude to industrialization for cheap
manufacturing. The wreckage of the USEconomy occurred from depleted industry, a primary cylinder
of wealth creation from added-value enterprise.
The Wall Street banksters run their gold carry trade into the ground. Permissive
USFed monetary policy
opened the door to a housing bubble. The adoption
of Fannie Mae was done under the USGovt roof,
for safe harbor during criminal investigations.
The usage of the MERS title database turned
widespread, which enabled the brisk mortgage
bond trade. The heavy mortgage bond purchase
by the USFed in
QE1 and QE2, mostly hidden from view, became
a mainstay. The sweet settlement deals between
states and Wall Street banks drew criticism
but continued. The hopeless skein of USGovt
home loan assistance programs turned vacant
became a nuisance. The big banks cooperated
to keep homes in inventory as REO assets following
foreclosure, which will later be shoved into
the USGovt channels that lead to the Fannie
Mae vat. The Jackass does not subscribe totally
to the Lindsey Williams account on the future,
but it makes too much sense and fits with
events well.

As
one informed New
York City subscriber said, "The actions
are all part of the show, as these guys all
look like scripted role players in the collapse
of the dollar, which is fully designed by
the Anglo-Americans themselves. An outbreak
of war still looks good to solidify the chaos.
Clearly this money will not be sterilized
(as you the Jackass have argued well) if the
bankers are going to buy up Treasurys
issued by the USGovt to the Fed and then sold
on. Circles of flow are assured as the new
money enters into the system at a gigantic
rate of speed, which will create massive inflationary
pressure. Witness the foreclosure on the American
people."

My
view is shaped by observing the anti-USDollar
movement going on. It is the fly in the milk,
which dictates the end game in removing it
from global reserve status and in shutting
down the USDollar
itself. Rather than disrupt the American foreclosure
plan the foreigners led by China
will merely dictate the timetable, as they
fashion more non-US$ trade settlement vehicles.
See the Iran
oil to India
and China, not settled in USDollars
anymore. See the numerous Chinese swap facilities,
known as barter. One must be curious what
happens to folks who own homes free &
clear like my father and sister. What also
might happen to folks with low monthly payments
on home loans, with only 5 to 7 years left
on amortization schedules that proceed on
course. My belief
is that the plan is to capture at least 35%
to 40% of American homes. Anywhere close to
the critical mass of 50% will work for the
Syndicate in creating a debt slave state.
They can tolerate the valid homeowners and
even some gold owners, since they will not
be in the majority.

◄$$$
CANTOR FITZGERALD (THE SIGNIFICANT BOND FIRM)
WAS DOWNGRADED BY MOODYS. BIG-TIME TROUBLE
COMES FOR THE OFFICIAL BOND DEALERS, WHO FACE
A TOUGH SQUEEZE FROM LOW YIELDS AND USFED
BUYING. CANTOR PLAYED A KEY ROLE IN THE 911
ATTACKS WITH DEEP COMPLICITY TO DESTROY JPMORGAN
BOND COUNTERFEIT RECORDS AND OTHER RUSSIAN
BONDS DUE TO MATURE IN THE FOLLOWING DAYS.
CANTOR IS A DEATH MERCHANT, NOT BOND MERCHANT.
$$$

Cantor
debt was cut to junk by Moodys
on capital markets pressure. Their hiring
expansion plan for 800 people has not halted
the profit slide. The firm was downgraded
from Ba2 to Ba1, the highest level of speculative
grade. Moodys expects the capital markets operating environment to
be challenging for all participants for the
medium term, in their words. With struggles
to diversify revenues and stubbornly high
compensation expenses, the profit squeeze
is harsh. Brad Hintz of Sanford Bernstein
concluded, "It certainly makes it
difficult to expand a company in the face
of a significant downgrade. A non-investment
grade rating for a broker is not a death sentence,
but the lower rating will limit financing
alternatives and reduce the willingness of
counter-parties to deal with a firm."
May the firm die!

Cantor
Fitz sill holds investment grade rankings
of BBB from Standard & Poors and Fitch Ratings. However, S&P lowered its outlook
on Cantor to negative on January 27th, with
no updates since then. The firm's brokerage
arm plans to boost its staff from the current
1600 in the future, probably adding another
500 sales traders in the next two years with
plans to build its investment banking and
asset management units. Cantor Fitz lost 658
employees in the September 11th World
Trade Center
attacks. The upper echelon of the firm had
direct complicity in the attack, according
to several sources. Cantor Fitz colluded
with JPMorgan to destroy extensive USTBond
records on counterfeit of $2.2 trillion, as
well as records for unique $240 billion in
Russian Bonds due to mature in the following
days. Typically JPMorgan would sell far
more USTBonds than
the USGovt would issue, with this scum bond
merchant doing the dirty work, covering the
trails.

Cantor
Fitz was prepared for the mass murder and
data destruction, having moved its backup
storage to New
Jersey in the previous summer. Do not credit
luck but rather planning. Cantor also moved
out of the World
Trade Tower
their valued workers, and set up for a horrendous
death certain workers who were troublesome
in cooperating with the bond deep six project,
or workers deemed worthy of collateral damage.
Moodys reports the
firm has plans to diversify revenue sources
aside from its inter-dealer brokerage franchise
(BGC Partners) by adding sales, trading, and
banking capabilities. See the SFGate
article (CLICK HERE)
and Reuters article (CLICK HERE).

The
Jackass would like to see the firm fail and
be plowed under, but not before exposure of
their vast crimes in aiding the fascist takeover.
The Cantor downgrade indicates something
bubbling to the surface, deep distress for
bond dealers. The intermediaries for USTreasury
Bond sales are all suffering. The margins
to the bond middlemen are tiny and their end
buyers are gone. The ultra-low bond yields
means skimpy profits for the dealers
at a time when the main bond buyer is the
USFed. Their purchases
from QE1, QE2, Operation Twist, and QE3 severely
limit the dealer profits. Witness
more extreme bond structural damage from ZIRP
and QE in bubble finance.

##
USFED SURRENDERS TO QE3

◄$$$
THE QE3 BOND MONETIZATION PROGRAM WAS RAMPED
UP RADICALLY AND ALMOST SECRETLY RIGHT AWAY.
THE USFED ANNOUNCED RIGHT AWAY THE VOLUME
OF BOND PURCHASES WOULD BE DOUBLED. THE USFED
SOFT PEDDLED THE VOLUME OF THE PROGRAM WHEN
INTRODUCED. LIKE USGOVT PROGRAMS, ONCE BEGUN
THEY CAN BE VASTLY EXPANDED. THE STERILIZATION
DEVICE WILL BE ABANDONED OUT OF SHEER URGENCY.
LOOK FOR PURE INFLATION TO WARD OFF COLLAPSE.
MY BELIEF IS THAT THE USFED IS IN PANIC MODE.
THEY WILL CONTINUE NAKED SHORTING OF COMMODITIES
AND GOLD, WHILE THEY SLOWLY ENGAGE IN ECONOMIC
DESTRUCTION TO REDUCE FINAL DEMAND. $$$

The
USFed is talking
to the public with one voice, and taking more
extreme action when behind closed doors. Perhaps
the central bank reacted to the worst back-to-school
retail sales chapter in decades. The data
tells the story. On October 1st, the USFed doubled their bond purchase program, compared to what
they announced at its inception, a significant
even not mentioned in the financial rag press.
Best to deceive on stage, and do what is urgently
required when busy at the window. Any commentary
about protecting the bond monetization with
sterilized action is verifiable noise. Witness
pure hyper monetary inflation of the worst
kind. Michael Pento told King World News on October 1st, "The Fed
doubled down on QE3 this morning and unofficially
announced QE4. Charles Evans did not indicate
that these new and additional purchases, which
will start in January, would be sterilized."

The
volume and missing sterilization indicates
panic in bold terms. Pento believes the mainstream media does not comprehend the
nature and extent of the next QE program.
He expects it will have massive implications
for the markets, including Gold and Silver.
Pento has been highly
accurate regarding his predictions of central
bank moves. Pento
has a good ear to the ground, noting that
the propaganda behind the supposed ISM (rigged)
number pushed many financial markets. Once
more, the lift was due to the USFed
and the monopoly money it will shoot into
the markets from central bank fire hoses.
It lifts all markets, but not in value, only
in perceived nominal price. Money is rapidly
being debased. Pento did not mince words. Pento
interprets the actions as the USFed
having doubled down on QE3 and unofficially
announced QE4. They did this even when
the echoes of QE3 are still reverberating
around the room from the bond purchase plans
being announced just days earlier.

Chicago
Fed President Charles Evans is the right hand
man to Bernanke, and the Chief Architect of
QE3. The basis of the QE3 plan, as announced,
is to purchase $40 billion of mortgage backed
securities each month, until the unemployment
rate shows a notable decline. Evans has stated
his desire that the USFed
should continue buying at least $45 billion
more of long-term USTreasurys, even after Operation Twist ends in January. He
will be a full voting member in the FOMC next
year. Note the extreme importance in his most
salient point. Evans did not indicate that
these new additional purchases would be sterilized
when they start in January. A key distinction,
since the monthly $40 billion of QE3 is not
to be sterilized, but the $45 billion in Operation
Twist has steadily been sterilized. A
footnote. By sterilized is meant that
the central bank is buying long-date USTreasurys,
but using cash from sold USTBills
of shorter maturity. The cash from the sale
is used to fund the new purchases, no new
money infused. Evans avoided the sterilized
topic entirely, since the new purchases will
apparently use fresh money infused into the
system. That is the most dangerous kind of
action a central bank can take. They have
run out of USTBills to sell, an inventory dry of short-term instruments
with brisk liquidity.

The
ugly factor is the USFed
does not have many short-term Treasuries left
to sell.
Evans said the $45 billion a month should
last at least a year. That's $540 billion
worth of what he indicated would be a combination
of mortgage backed securities and USTreasurys. The harried desperate central bank cannot
sterilize $540 billion of new purchases, in
addition to the $480 billion dollars already
slated for action on the tail end of Operation
Twist. The USFed
balance sheet shows that they are almost empty
of short-term USTBills.
Their next heavy volume action will be an
unsterilized, open-ended, double-down version
of QE3. The pressure is on for rise in the
precious metals market. The news is huge,
not an official announcement, yet easily interpreted.
Bernanke has not sanctioned this move in any
official capacity. However, as architect behind
QE3, regard Evans as fully indicating the
decisions to become policy. In September,
the USFed did precisely
what Evans outlined earlier. He has credibility
for its direction. Now he is laying out what
QE4 (or QE3+) will become. See the Investors
Hub article (CLICK HERE).

Keep
in mind that we are being exposed to QE to
Infinity, as defined by continuing without
end. Watch as the total QE bond monetization
volume will eventually surpass $3 trillion
and work its way toward $4 trillion. The USFed
is over halfway on the total potential. The
criterion until a favorable economic response
registers is prescription for ruin since a
rising cost structure is assured, just like
QE1 and QE2. The entire bond purchase initiative
will harm business profitability, cause job
cuts, and result in lower incomes. The monetary
policy has turned global, in a queer attempt
to undercut the Competing Currency War by
adopting the monetary policy uniformly. The
price paid will be uniformly rising cost structure
imposed on global economy, from food to energy
to materials. The only defense by the
central banks is naked shorting of the commodity
markets, and destruction of economic fabric
so as to dampen final demand. They will do
both, as they always have done. They are merchants
of market corruption and economic destruction.
See the recent effects of the QE programs
on food and energy. Notice that food prices
marched upward even after QE1 had come to
an end.

◄$$$
THE USFED QE3 WITH $40 BILLION ON MORTGAGE
BONDS IS DESIGNED TO COVER THE WORST BOND
FRAUD AND MOST EGREGIOUS BOND CRIMES, IN ORDER
TO ENABLE A CLEARING OF THE LOGJAM. THEY WANT
TO ENGINEER A FLUSH OF FRAUD SO THAT THE HOUSING
MARKET CAN REBOUND, AUGMENTED BY FOREIGN DEMAND.
QUESTIONS REMAIN ON WHO OWNS HOME LOANS FOR
PEOPLE STILL IN THEIR HOMES, AND CURRENT ON
PAYMENTS. AT THE SAME TIME, THE PLAN IS TO
CEMENT FEDERAL OWNERSHIP AND CENTRAL BANK
OWNERSHIP OF HALF OF AMERICAN HOME TITLES.
WITNESS A HIDDEN MARXISM MANEUVER THAT SHOULD
BE EASIER TO NOTICE, EXCEPT THE NATIONAL INTELLECT
IS LACKING. FITTS MAKES A POWERFUL INDICTMENT,
AS A TRUE EXPERT WITNESS. $$$

Catherine
Austin Fitts is the foremost expert on Fannie
Mae, the mortgage fraud, and the full proper
accounting of the agency, including the pilferage
by past presidents Papa Bush and Bill Clinton
of $1.5 trillion, stolen from its accounts
with full protection. She has survived three
murder attempts and a stripping of professional
license. When she speaks on mortgage matters
at a national level, people should pay attention.
She is expert. The following are some of her
thoughts. The housing market cannot recover,
in part because of multi-$trillion fraud,
a point the Jackass has made for over four
years. Foreigners own a lot of fraudulent
mortgage bonds. So do domestic pension funds.
The QE3 plan focuses on mortgage bonds in
order to clear the market of fraud-ridden
mortgages, their toxic appendages, and related
channels. She states her opinion that fraud
was the original plan, hatched a decade ago
by Wall Street, although she did not identify
them. See the Solari
article (CLICK HERE).

"The
challenge for Ben Bernanke and the Fed governors
since the 2008 bailouts has been how to
deal with the backlog of fraud, not just
fraudulent mortgages and fraudulent mortgage
securities, but the derivatives piled on top
and the politics of who owns them, such as
sovereign nations with nuclear arsenals, and
how they feel about taking massive losses
on AAA paper purchased in good faith.
On one hand, you could let them all default.
The problem is the criminal liabilities would
drive the global and national leadership into
factionalism that could turn violent, not
to mention what such defaults would do to
liquidity in the financial system. Then there
is the fact that a great deal of the fraudulent
paper has been purchased by pension funds.
So the mark down would hit the retirement
savings of the people who have now also lost
their homes or equity in their homes. The
politics of this in an election year are terrifying
for the Administration to contemplate.

Various
court squabbles over the MERS [title registration]
system for registering mortgages are also
nipping at the Fed and Treasury heels. It
is hard to win a presidential election in
3100 counties when multiple federal agencies
are in the local courts trying to foreclose
on half the county while supporting arguments
that a national registration system is free
to violate local property laws with impunity.

So,
it looks like the Fed decision last week
to buy $40 billion a month in mortgage paper
is the ultimate plan to clear the market once
and for all of fraudulent mortgages, mortgage
backed securities, and related derivatives.
This means Fannie and Freddie will be bailed
out and winding down through the back door.
This means the big banks may be paid in full
for your mortgage. It also means your pension
fund assets will not be marked to market,
at the price of debasing the purchasing power
of your assets and benefits.

The
Fed is now where mortgages go to die. Thousands
of mortgages on homes that do not exist or
on homes that have more than one first mortgage
are now going to the Fed to disappear.
Thousands of multi-family and commercial mortgages
will be bought up as well. As this happens,
trillions of dollars that have been amassed
offshore will be free to come back into the
US to buy up and
reposition land, farmland, residential, and
commercial real estate and other tangibles.
With documents shredded, criminal liabilities
extinguished, and financial institutions made
whole, funds can return without fear of seizure.

QE3
proves beyond any shadow of a doubt that the
extent of the fraud was as bad as I said it
was. You can count up the bailouts. The QE1,
QE2, QE3 the numbers
speak for themselves. The fraud was indeed
in the many trillions of dollars. It was intentional.
It was a plan.

The
$64,000 question for those whose house is
underwater or whose mortgage is in default
is whether or not you still owe on your mortgage.
Certainly, you still do as a legal matter.
If the bank has been paid off, arguably in
some cases several times, why not you? Let's
see if Fannie Mae, Freddie Mac, and the big
banks are under orders to quietly pass through
a portion of their largesse to troubled homeowners
in amounts sufficient to unfreeze the market.
If you are in a workout situation, you need
to take notice."
Expect very little, a trifling amount, to
filter down to the people, who are not a priority.

◄$$$ KAMINSKY CALLS BERNANKE
A KAMAKAZI PILOT.
MONETIZATION WILL NOT END WELL,
BEGINNING WITH THE EXTENT THE PRIVATE FEDERAL
RESERVE BANK CARTEL WILL FUND THE USGOVT DEFICIT.
MY BELIEF IS CLOSE TO 100%. $$$

Gary
Kaminsky is former
managing director of Neuberger Berman. He
offered a voice of reason on the latest insanity
by the USFed that repeats on a much larger scale the reckless hyper
monetary inflation that was conducted 70 years
ago in war-torn Germany. Curiously,
the US
is also war-torn. The mantra assumes that
given its American roots, the QE bond purchase
plan must eventually be successful. They are
pushing the same lever that has not resulted
in any tangible positive effects in the two
years. Yet they repeat its application, and
will ramp up its volume. Kaminsky
was succinct and devastating in his criticism.
Against a backdrop of mind-numbing past bond
monetization, gigantic central bank balance
sheet expansion, almost total dependence upon
the USFed to finance
the USGovt deficits, and secretive heavy usage
of derivatives to maintain the USTBond
bubble, he states the obvious for the enlightened.
His words would shock the dim bulbs that comprise
one third the US
population. His words are boring to the dimmer
bulbs who are not interested in national finances
or the great American downfall.

Kaminsky said, "We know this will end
ugly! Bernanke is a kamikaze pilot, experimenting
[in monetary policy] and is destined to fail."
He went on to cover the many sides of the
reckless lunacy that has become engrained
USFed policy, not mincing words. From the lack of credibility
of any USFed exit,
despite the openly stated desire back in 2009
(which the Jackass dismissed immediately as
impossible), to the explosion of the monetary
base, which few analysts seem overly concerned
about, Kaminsky
compared the United States to Japan as an
obvious template for our path to continue
past the Keynesian endpoint, as in ruin.
See the Zero Hedge article (CLICK HERE).

My
view is that the final destination for the
US
will not be anything like where Japan
finds itself. The US
lacks industry like Japan,
and a trade surplus. In fact, the Chinese
presence depleted the famed surplus fixture.
The US
is fully dependent upon Weimar
monetary expansion and bond purchase, unlike
Japan.
The US
is fully devoted to war, unlike Japan.
The US
permits massive bond fraud and deep banker
criminality, unlike Japan. The US fights to keep the USDollar
value up due to its perceived toxic nature,
while Japan fights to keep the Yen down due to its perceived
attractiveness. For those unfamiliar with
the term Kamakazi, it means suicidal. So Kaminsky claims that Bernanke is destroying the USEconomy and financial structure with reckless abandon and
sheer desperation, pressing harder on the
levers that do not work, while aware of the
outcome.

For
a quick analysis of winners and losers from
the QE3 upcoming debacle, see the Zero Hedge
article (CLICK HERE).
For a summary on how the USFed
strives to achieve a better cleaner inflation
in their always destructive inflation management
theme, see the Yahoo Finance article (CLICK
HERE).
Observe the travesty that is the USFed
monetary policy. Welcome to Bernankville,
the city of Jokernomics, where central
bank policy could not be more errant, heretical,
bizarre, and unavoidable given the corrupt
members at the helm. See the Before It's News
article (CLICK HERE).
For another solid review of the mortgage bond
aspect of the QE initiative, and the diminishing
returns potential for housing market benefits,
see the Financial Sense article by Charles
Hugh Smith (CLICK HERE).

◄$$$
SYSTEMIC DE-LEVERAGING IS INDEED A MYTH, AS
DOUG NOLAND STATES. BUT THE SYSTEM IS FAR
MORE UNSTABLE THAN HE PERCEIVES IT. BUBBLE
DYNAMICS TO BE SURE, THE DERIVATIVE MACHINERY
HAS MADE THE ENTIRE USTREASURY BOND COMPLEX
A GIGANTIC LEVITATED MONSTER. THE DESCRIPTION
OF PONZI DOES NOT GO FAR ENOUGH IN THE CRITICISM.
HE CITES ABSENT INTERMEDIATION FOR THE USTBOND
COMPLEX, WITHOUT ACKNOWLEDGMENT OF THE INDIRECT
EXTENSIVE DERIVATIVE ROLE WITH INTEREST RATE
SWAPS. HE HAS SOME BLIND SPOTS, BUT THEY ARE
OF MACHINERY WELL HIDDEN. $$$

Doug
Noland of the Prudent Bear is a solid analyst.
He offers a summary description of the bubble
foundation for the US financial structure, complete with constant
printing press operations. He stresses how
the system is NOT in any way de-leveraging
as claimed widely in the financial press.
The central bank and the big US banks have not reduced
leverage at all. The USFed
has increased its own leverage and balance
sheet many-fold. However, he does not
mention a highly important gear system to
maintain the levitation, the interest rate
derivatives. They act as gigantic powerful
intermediation proxy to maintain the ultra-low
bond yields and bill yields, in the face of
chronic $1.3 trillion annual deficits to securitize.
He implies that the Ponzi
scheme and bubbly foundation and hyper monetary
inflation has a stable manifestation in the
USTreasury Bond
complex. Not at all!

Noland
wrote, "A 100% increase in Federal
debt and 200% growth in the Federal Reserve's
balance sheet are surely not indicative of
system de-leveraging. Such extraordinary credit
developments do, however, have profound effects
throughout the markets and real economy. The
ongoing credit expansion has inflated incomes,
spending, corporate earnings, and securities
prices, in the process sustaining for now
the US economy's bubble structure. And I would argue
strongly that the data support the thesis
that our system remains dominated by bubble
dynamics. Also keep in mind that, in contrast
to risky mortgage debt, federal debt requires
little intermediation. The marketplace
absolutely loves it just the way it is, conspicuous
warts and all. For now at least, it is money
and shares money's dangerous attribute of
enjoying virtually insatiable demand. The
only alchemy necessary is to keep those electronic
printing presses running 24/7. It is, after
all, the massive inflation of federal debt
that is inflating incomes, cash-flows and
profits, equities and fixed-income securities
prices, and government tax receipts and expenditures,
in the process validating the moneyness of the ever-expanding level of system debt (Ponzi Finance)." See the Prudent Bear article (CLICK
HERE).

The
situation is much worse than the dire description
offered by Noland. It is utterly amazing
to the Jackass that not 5% of the bond analysts
even remark, not even passing comments, about
the enormous Interest Rate Swap structures
that maintain the near 0% short-term USTBills, the sub-2% yield in 10-year USTNotes,
and the sub-3% yield in 30-year USTBonds.
The bond analysts are either not aware (incompetent)
or paid off to exhibit blindness. Much for
the Jackass and Noland are in agreement. He
paints an ugly face on the situation, when
it deserves a nightmarish horror facade in
description. The QE bluster has lifted bank
sector earnings from their USTreasury carry trade, while their toxic bonds remain on
the books at lunatic high values, and their
derivative book losses are ruinous even as
they strain to keep bond yields low. The strain
is greater with each new month of added debt
financed. The rest of the economy has suffered
the consequences of rising costs and shrinking
profits. Noland seems off his game, with a
huge blind spot on the Interest Rate Swap
strain that supports the USTBond complex. It is not stable. He does not see much of
anything that is behind the scenes. Smart
guy, but second level insights. Maybe
in his favor, he is paid never to comment
on the supporting derivatives.

Notice
the immediate effect, by the way, on hourly
wages when QE is put on. The damage is to
profit margins, resulting in shorter worker
hours and outright job cuts due to rising
costs. Also, and much more importantly, notice
how the Money Velocity slows down despite
the extreme central bank activity with heavy
Quantitative Easing programs. The bond purchase
initiatives do not address any fundamental
problems, except to provide a buyer of USTBonds,
and the redemption of toxic bonds held by
the big US banks.

◄$$$
BILL GROSS REGARDS GOLD AS THE SURVIVING ASSET
DURING THE TEST OF FIRE. THE FISCAL SITUATION
FOR THE USGOVT TRANSCENDS BONDS AND AFFECTS
THE USDOLLAR. GROSS EXPECTS THE DEEP DEPENDENCE
UPON THE USFED TO FINANCE THE DEBT TO BE A
PRESCRIPTION FOR HYPER-INFLATION, FOR USDOLLAR
DECLINE, AND FOR A RISE IN THE GOLD PRICE.
$$$

Bill
Gross of PIMCO has credibility. As preface,
recall that he missed the big USTBond rally in 2010 and 2011. But he missed it because he
failed to anticipate massive derivative abuse
in Interest Rate Swaps to push down the long-term
bond yields and thus create a false flight
to safety. He overlooked the potential of
a rigged corrupted USTBond
market. My firm opinion is that he is forbidden
to discuss this oversight. In fact, most big
bond experts are forbidden. Gross wrote, "Unless
we begin to close this [USGovt budget] gap,
then the inevitable result will be that
our debt/GDP ratio will continue to rise,
the Fed would print money to pay for the deficiency,
inflation would follow, and the dollar would
inevitably decline. Bonds would be burned
to a crisp and stocks would certainly be singed.
Only Gold and real assets would thrive within
the Ring of Fire. If the fiscal gap is not
closed even ever so gradually over the next
few years, then rating services, dollar reserve
holding nations, and bond managers embarrassed
into being reborn as vigilantes may together
force a resolution that ends in tears. The
damage would likely be beyond repair."

Gross
does not expect the USGovt to step away from
debt abuse. The federal deficit will continue
to be outsized and dangerous, since the political
apparatus is totally broken and the war is
a new constant theater. The chronic abuse
will be next to impossible to halt. However,
expect the derivative levers to work overtime
to support the USTBonds
until they break in full view, from over-use,
obscene volume, and reckless leverage. See
the Zero Hedge article (CLICK HERE).

Notice
how the US,
the UK, and Japan
each have worse structural fiscal gaps than
the Spain
or Greece,
which grab much attention. The US
and UK
has joined Japan in the Zero Percent
dead end corner. The US press networks prefer to deflect attention
away from the similar fiscal mire at home.
The USGovt fiscal cliff is totally unaddressed,
like a pack of 800-lb gorillas lodged at the
dinner table. The war costs are totally unaddressed
also, like a cadre of Mafiosi also lodged
at the dinner table. The USGovt spends $7
to $10 million per minute, with no respite
coming, depending upon the liability definition.
The total USGovt deficit is nearly $17 trillion.
It will surpass the $20 trillion mark during
the next Administration. Obama would not try
to slow the deficit growth, but Romney would
try. Neither will succeed. The American fiscal
situation is fast turning into a combination
of a Weimar
tragedy and a Keystone cop comedy, with a
Nazi meat grinder at work against wealth and
ethics. See the YouTube video (CLICK HERE).

◄$$$
JAPANESE BANKING OFFICIALS ADMIT THAT MONETARY
EASING DOES NOT WORK, WHEN THE MOTIVE IS TO
PUSH DOWN THE YEN EXCHANGE RATE. THE COMPETING
CURRENCY WAR DEBASES ALL CURRENCIES SIMULTANEOUSLY.
THE ENTIRE SET OF MAJOR CENTRAL BANKS IS WORKING
IN UNISON TO PUSH THE COST STRUCTURE HIGHER
FOR THE GLOBAL ECONOMY IN A DESTRUCTIVE SEQUENCE.
$$$

In
Japan,
the former finance minister Sakakibara
is known affectionately and respectfully by
a nickname. Mr
Yen admitted that Japan
and other major central bankers have reached
the limit to stimulate growth through monetary
easing. He said, "the impact of competitive monetary easing among leading industrialized
nations is diminishing." Compared
to 1995, the policy strategy has no effect.
His view was expressed in futility, as Japan cannot succeed in pushing its currency down
when the United
States will push back
harder in turn. Witness the primary piston
stroke of the Competing Currency War machinery
that has been adopted worldwide, one to cause
uniformly higher cost structure in a global
destructive dance. He made indirect reference
to the how the Bank of Japan should not bother
to purchase foreign bonds. He made some vapid
comment about accepting slow growth. He
has tacitly joined the crowd that suggests
the only way out of the mess is to allow the
economy to clear itself.

The
Japanese should be listened to by the American
monetary witch doctors. Tokyo wrote the book on Quantitative Easing, zero
percent rates, and confirmed their futility.
They are experts on the lame tool that creates
zombie structures. They have been stuck for
over 20 years in the 0% corner, a fact the
US bankers ignore. Neither Japan
nor the United
States will ever leave
the 0% corner, since no exit strategy exists.
The Japanese could sit on a stable stool in
that corner, but the US cannot. It is the Keynesian Paradox that
nitwit Western economists ignore. It is the
chapter in the Keynesian Economics textbook
that was never written. If written, it was
torn out and removed, with deep prejudice
and bias.

##
THREAT OF COLLAPSE NEARS

◄$$$
INTEREST RATE SWAPS ARE BADLY AFFECTED BY
MOVEMENT IN THE USTBOND YIELDS. ANY MEASURABLE
MOVEMENT UP OR DOWN IS DESTABILIZING. THE
T.N.X. YIELD INDEX HAS NOT BEEN STABLE SINCE
EARLY THIS YEAR. GREAT STRESS FROM SWINGS
IS RACKING THE INTEREST RATE DERIVATIVES IN
THE MACHINERY ROOM. LOSSES ARE BEING HIDDEN.
$$$

The
hidden Interest Rate Swaps do not receive
much of any attention, even by the experts.
They are responsible for keeping long-term
bond yields down when foreign creditors have
left the market, when chronic $1.3 trillion
debts are the mainstay, and when AAA-rated
sovereign debt is globally sold off. The IRSwaps suffer damage when rates move much, either up or down.
Since early in 2012, the 10-year yield (TNX)
has not been stable. It has thus caused great
strains and losses to the derivatives that
support the USTBond complex. In March the TNX was at 2.4%, then in July
1.4% (to register a correct Jackass forecast),
then in August 1.85% in a rebound, then in
early Sept 1.57% for another rally, then in
late September 1.9% even though the USEconomy
showed no strength. In the last couple weeks,
it has hovered around the 1.7% to 1.8% level.

The
movement swings this year is playing havoc
with Interest Rate Swaps, the controlling
machinery largely funded by Morgan Stanley,
but operated by JPMorgan. Some deep damage
is occurring in the JPM basement. The losses
so far are well hidden, with grand deceptions
on quarterly earnings statements. My guess
is the losses are hidden with the USFed
help, or else tossed around from one
Wall Street firm to another via swaps in a
hot-potato exercise to avoid detection. These
firms have already been caught swapping their
losses at quarterly end on a regular basis.

The
TNX chart looks like it is preparing for a
move up. Pressure is building from a rising
channel trend evident since June after the
big corrected forecasted drop. The 50-day
moving average has shown some upward bias,
with momentum. The unresolved USGovt deficits
are providing constant pressure on the long-term
bond yield. The swings could be causing major
damage in the Interest Rate Swap basement,
where the bonds are defended by leveraged
over-used machinery. The many-sided assaults
on the big US
banks make for USTBond
defense more difficult. Watch for a handoff
in some responsibility from JPMorgan to Citigroup,
which in my view is being prepared as the
bagman to suffer major losses, if not a restructure
buyout.

◄$$$
CENTRAL BANKS ARE BUYING STOCKS, AS THE FINANCIAL
PLATFORMS ARE COLLAPSING. THE BIG US-BANKS
CANNOT EARN A HEALTHY BOND YIELD, JUST LIKE
AMERICAN PENSION FUNDS. THE EXCHANGE STABILIZATION
FUND IS ON HYPER-DRIVE, WITH NO DISCLOSURE
IN OVER FIVE YEARS. A FULL DISCLOSURE WOULD
CAUSE GREAT DISRUPTIONS AND CONTROVERSY, WITH
DEBATE ON THE TOXIC UNDERPINNING TO THE UNITED
STATES FINANCIAL STRUCTURE. $$$

Those
who criticize the conspiracy nuts for their
steady claims of printed money being used
to purchase stocks should really shut up.
Reuters reports that foreign central banks
are buying more stock shares because of the
paltry returns from top-rated sovereign bonds.
The USGovt openly admits reliance upon the
Working Group for Financial Markets (aka Plunge
Protection Team) to support the US
stock market for many years, to keep America strong and to ensure liberty. The Israeli
central bank is investing 2% of its FX reserves
in US equities and plans to raise this to
10%, up to US$8 billion. The South Korean
central bank has lifted its equity weighting
to 5.4% last year from 3.1% in 2009. The Czech
Republic bank has increased its holdings to
10%, openly criticizing the poor bond yields.
Fully 60% of official reserve managers consider
that equities are more attractive than a year
before, according to a unique survey of 54
central banks. They control 49% of global
reserves. They cite the most dangerous word
for American ears, diversification. They see
the USTBond as toxic
and dangerous, as alarm bells go off following
the QE3 initiative resumption.

Missing
in action is any formal disclosure or public
statement that reports on the giant fund that
manages the USTBonds
and USDollar, keeping them stable and strong. The Exchange
Stabilization Fund balance sheet has had no
update in disclosure since March 2007, and
for good reason. It would obviously show
some dubious and embarrassing details for
the props to the major US$-based vehicles.
For guttural laughter, recall
that the NYFed is
their execution trader. From their
last statement as of end March 2007, the Exchange
Stabilization Fund total assets were $45.9
billion which included $20.8 billion in foreign
currencies, $9 billion in SDRs (unit of Intl
Monetary Fund major currency basket), and
$16.1 billion in USGovt securities. See the
New York Fed document (CLICK HERE).

◄$$$
$15 TRILLION DOLLARS MUST BE PUT INTO PROPER
PERSPECTIVE, IN STACKS OF $100 BILLS. THE
USDOLLAR IS FAST BECOMING A ZIMBABWE LOOKALIKE. $$$

Observe
$100 million on a palette of $100 bills, the
height of a man. See the Daily Cognition pictorial
rendition of stacked paper money (CLICK HERE).

Observe
$1 trillion, otherwise stated as $1000 billion.
Its size is over four football fields of stacked
$100 bills on an array of palettes, the height
of a man.

Observe
$15 trillion, the former USGovt debt limit.
The size resembles the volume of a few city
blocks, including the height from some skyscraper
buildings. The unit is still the stacks of
$100 bills.

Observe
a $100 trillion Zimbabwe
bill, where the USDollar
is heading. The Jackass is the proud owner
of one of these weighty ZBills.

##
EUROPEAN BANKS LEAD TOWARD RUIN

◄$$$
DRAGHI'S NEXT STILLBORN BABY IS THE ERRANT
OUTRIGHT MONEY TRANSACTIONS PROJECT, WHICH
HAVE BEEN DECLARED ILLEGAL ALREADY IN SOME
CIRCLES. THE DRAGHI BETTER BOND DREAM SEQUENCE
IS FAST FIZZLING FROM LACK OF CREDIBILITY
AND SIGNIFICANT WORTH. TO SEE HIM REVERED
SHOWS THE LOWEST LEVEL OF AWARENESS OR INTELLECT.
$$$

Call
it the Draghi power
play, but the Outright Money Transactions
violate the EU charter directly. Designed
as a program of conditional bond buying targeted
at specific countries to restore their sovereign
bond stability, and to repair a broken monetary
policy transmission mechanism, the OMT has
no limits, complies with the ECB price stability
mandate, and contains the required flexibility
to interrupt funding for certain countries
for non-compliance with imposed conditions
or failure to meet performance guidelines.
However, the OMT is much more than stated.
On its face it is illegal, in clear violation
of the Treaty on the Functioning of the European
Union. For the last two years, the frequency
of basic violations has turned common in expedience,
like for the EuroCB to enter into primary market sovereign debt purchases.
See the Zero Hedge article by Blankfiend
of Fibs & Waves (CLICK HERE).
The following arguments attack the OMT for
its deficient integrity.

OMT
is a Eurobond equivalent, which target specific
countries, but which shares the potential
losses on bond purchases among the member
central banks according to their capital key.
The scheme revisits the rejected red versus
blue concept, for participants versus the
others. The OMT life support could quickly
kill the bonds outside the corral with wrong
color label.

OMT
is a banking license for the European Stability
Mechanism. Behind the official window, the
Euro Central Bank would be free to purchase
potentially unlimited bonds on the secondary
market, which extends greatly the resources
of the ESM without a formal banking license
or leverage scheme. It also by-passes
any safeguards countries would put in place
to limit their bailout losses. A legal clause
forbids the EuroCB
from creating a credit facility. An official
banking license for the ESM has been declared
in violation of Article 123(1) of the TFEU
by no less than the ECB itself.

OMT
is a sham, since the system players would
not have the resolve to halt or reverse bond
purchases if a target country reneges or falls
short on its commitments. Enforcement of
compliance is an empty threat. Consider
it an OMT methadone program as no discharging
of patients for abuse would be possible or
viable.

OMT
is fiscal policy by Central Bank fiat. Bear in mind that Eurobonds, ESM banking licenses, and
ESM leverage schemes have all been previously
rejected by various European political leaders,
from Germany
to France
to Finland. OMT is a clever way
to skirt all of those objections and concerns
in order to restore confidence in sovereign
European debt markets. The maneuver is a bold
power grab by Draghi.
OMT embarks Europe on
the treacherous path of fiscal policy by unelected,
unaccountable central bank elite dons.

◄$$$
THE DRAGHI BOND DREAM HAS BEGUN TO FIZZLE
BEFORE IT IS FULLY HATCHED. THE BOND BUYING
PLAN HAS CIRCLED THE DRAIN AS ECB/BUNDESBANK
BRINGS IN THE LAWYER TEAM. $$$

As
preface, Draghi's
first project was the Long-Term Financial
Operation that provided ample funding to redeem
impaired sovereign bonds from Southern
Europe. The project turned into a wrecking
ball quickly, causing sudden disasters that
fanned out across Spain and Italy. The problem was that the Euro Central Bank
had spent a couple months buying up the Spanish
and Italian Govt Bonds, thus lifting their values artificially. So when
the big banks from the two nations, and other
nations like France began to purchase the
same type of bonds, they overpaid. Before
too many weeks, almost all of them were not
only contending with paper losses, but their
banks were suffering worse than before. The
lesson was that the central banks distort
markets to the point that they cannot remove
the training wheels easily without causing
nasty falls and deep bruises from the broad
impact. The market interference is constant.

In
a stunning development, the Outright Money
Transactions were challenged for legality.
If not a still-born baby like the LTFO just
a few months ago, perhaps the OMT is best
described as a bastard child brought to enforce
a power grab. The lawyers at the EuroCB and Bundesbank lawyers hastily
gathered to examine the legality of the new
bond purchase program. Obviously, they are
illegal. So the challenge was how best to
present them, to exert pressure on the system,
and to sidestep the law. The entire DraghiEuroCB has conducted
an illegal operation for almost a year's time.
Make expedient the rules, not the law. Unlike
the US Federal Reserve, the EuroCB
is constrained. It cannot print money, cannot
buy bonds, cannot
legally do much of anything. The EuroCB
can process the tainted money printed by the
USFed and channeled
across the Atlantic,
but Draghi wishes to possess equal power to the USFed. These central banks are toxic paper factories,
bond undertakers, and money laundering criminals.

The
German Bild newspaper
reported that in-house lawyers were reviewing
the features of the OMT project to determine
what volumes were necessary and the extent
of time in order for it to break EU treaties.
The ECB is specifically banned from financing
state deficits. The heretic high priests
will find a way to declare that bond purchases
do not finance deficits, as long as an intermediary
works as middleman and as long as days pass
on the calendar. Mario Draghi
is insufferably arrogant, a typical Goldman
Sachs elite stained rectal pore. He went public
with a statement to the effect that inversion
in the Spanish yield curve was urgently in
need of reversal. Nothing
like market interference to halt the message
of recession or the low value of cash.
The Bild noted the
entire case could be referred to the European
Court of Justice. Both the ECB and Bundesbank
were preparing for such the event. Much consternation
has come over leaked disinformation of false
nature, in order to further the German anti-Europe
agenda. The floating continental consensus
is misplaced and ugly, that central banks
can solve every problem with a wave of the
magic money printing.

ECB
President Mario Draghi announced earlier in September that the central bank
stood ready to purchase unlimited amounts
of bonds issued by EuroZone member nations. However, the nations had to submit a formal request for
aid and fulfill strict domestic policy conditions.
As head of the Bundesbank, Jens Weidmann was the
sole dissenting voice in the ECB decision.
The plan is designed to lower the borrowing
costs of EuroZone
nations such as Spain and Italy by buying their bonds, a massive liquidity
enhancement device. But it has stirred anxiety
in Germany where some people
are accusing the ECB of venturing beyond
its mandate and potentially exposing taxpayers
to billions of Euros in risky debt. Obviously,
as buyer of last resort, or provider of rich
liquidity, the ECB will be a $trillion loser.
Being the liar and deceiver he is, from elite
roots, Draghi has
stated the plan is strictly within the ECB
mandate. Clearly it is not. See the Zero Hedge
article (CLICK HERE).
For a wider update on the European debacle,
check out Ambrose Evans-Pritchard and his
latest essay with analysis. Observers need
a program bill like for a play on stage to
keep up. See the Zero Hedge article (CLICK
HERE).

◄$$$
THE SWISS NATIONAL BANK IS IN A BIG PICKLE.
CAPITAL FLIGHT FROM THE ENTIRE EUROZONE CONTINUES
TO HEAD TO SWITZERLAND.
THE CENTRAL BANK CONTINUES TO DEFEND THE EURO
120 PEG VERSUS THE SWISSY. THIS UNIQUE RESERVE
CURRENCY WILL LEAP HIGHER IN TIME, TO SIGNAL
THE END OF THE EURO COMMON CURRENCY. $$$

The
tireless but foolhardy defense of the Euro
currency by the Swiss National Bank is resulting
in a bloat of reserves. The SNB is holding
a growing mountain of dodgy and toxic bonds
from throughout the EuroZone.
Some suspect it is largely German Bunds. Much
of it will be written down in losses. The
Swiss Franc exchange rate stands at 107.70
versus the USDollar,
but the Euro stands at 120.92 versus the Swissy.
This all important Swiss currency represents
the lever or trigger for breaking the Euro
Monetary Union, or its indicator. The Swiss Franc will jump higher to indicate
the ruin of the Euro currency and the imminent
grandiose losses for the big European banks.
It is not stoppable. The Swiss Franc will
move 20% to 30% higher.

◄$$$
SPANISH GOVT DEBT WAS CUT TO BBB- IN RATING.
NEXT ON THE DOCKET IN SPAIN IS THE EXPLOSION
OF HIGH END MORTGAGES. SPANISH FINANCIAL FIRMS
ARE GOING BUST. SPAIN ISSUES LOONEY TUNE LOTTERY
BONDS AS A CARNIVAL ATMOSPHERE HAS TAKEN OVER.
THE SECESSION MOVEMENT CONTINUES TO STIR AND
RUMBLE IN THE SOUTHERN REGION OF CATALONIA. SPAIN IS LOSING ITS CONNECTIVE
TISSUE AND INTEGRITY. $$$

Standard
& Poors downgraded
the Spanish Govt debt to BBB- and gave it a negative outlook. The cut
moves Moodys and
S&P to the same level. The cut came as
a surprise, piling on the woes. Another cut
would cause major problems. If both agencies
downgrade Spain
to BB+, which could happen soon, Spain will leave all the major bond indices, creating
some major volatility. The event might come
after US elections and after Spain
formally seeks EU assistance. The dimwitted
commissars at the EU insist that Spain proceed with austerity,
whose aggressive nature starting from Q4 would
surely cause a worse economic tailspin. However,
Spain must contribute EUR 3.8 billion to the EU
fund, better known as the Exchange Stabilization
Mechanism. Maybe Super Mario will lend Spain
the funds under the table!

The
ripples from the rating cut have come with
further downgrades by Standard & Poors
of covered bonds for banks, like for Banco Santander and Banco Bilbao
VizcayaArgentaria (BBVA), the largest
lenders in Spain.
But more could come like with Telefonica
and the Utilities. The firm also cut the ratings
of nine other banks and placed six on credit
watch negative status. The savvy anticipate
that Spain will soon impose capital controls, recommended
by the Intl Monetary Fund. See the Zero Hedge
article (CLICK HERE)
and the Bloomberg article (CLICK HERE).

Some
big financial firms have gone bust. More will
follow. See the Spiegel article (CLICK HERE).
A big fat long powerful fuse has been lit
in Spain. Once the elite are directly affected, phone
calls are made, high ranking jobs are lost,
and disruption to the system accelerates.
The home foreclosure process has been a delayed
fuse not lit for a few years. It is being
lit. The wealthy are going through the foreclosure
meat grinder. The final accounting to the
housing bubbles has at long last begun. See
the Zero Hedge article (CLICK HERE).

Against
the backdrop of deterioration and liquidity
stress, Spain has resumed issuance of looney tune lottery bonds to help in the bailouts. A carnival tone cometh, requiring only the barkers and toll takers
at the egress. See the Zero Hedge article
(CLICK HERE).
Although attempts for Catalonia
to achieve secession from Spain
will be extremely difficult, the movement
continues. At first it does not succeed, try
try again. The Spanish
Military threatens to prosecute its proponents
for treason. Few realize the region does not
speak Castillian Spanish. The mere fact that a critical mass is
behind the movement to give it significant
momentum and credibility is horrible news
for Spain, whose connective cultural tissue
is being torn at a time when its social integrity
is challenged. See the Zero Hedge article
(CLICK HERE).

◄$$$
SPAIN
IS IN THE PROCESS OF PARALYSIS FROM THE CONSTANT
OCCURRENCE OF PUBLIC DEMONSTRATIONS. EXPECT
NEW LAWS TO LIMIT PEACEFUL PROTEST, WHICH
WILL SURELY CAUSE VIOLENT REACTIONS WITHIN
THE PROTEST MOVEMENT WELL ALONG. $$$

A
shocking 2500 demonstrations occurred in Madrid
Spain
last year. That is 9 per day, with important
disruptions to businesses, truancy to workers
in offices, and heavy costs of cleanup. The
Spanish Govt is considering limitations of demonstrations, similar
to laws on the books in the United
States, the leading fascist
nation to emulate. The US
already limits free speech, peaceful assembly,
and taking photographs of police abuse. Spain
has proposed new laws of a similar nature,
to prohibit the video recording or the snapshot
photographs of local police doing their dirty
work. The beatings, mace sprays, and worse
might soon be illegal to be gathered in evidence.
The fascist state moves along apace. See the
Zero Hedge article (CLICK HERE).

◄$$$
THE FRENCH ECONOMY IS ACCELERATING IN COLLAPSE.
CAR AND TRUCK SALES ARE PLUMMETING. THE NATIONAL
MANUFACTURING INDEX FELL HARD. CONFIDENCE
IS DYING. MUCH FOCUS IS ON NEIGHBORING SPAIN,
BUT FRANCE
MIGHT BE THE FALLING PILLAR THAT TRIGGERS
A MAJOR FINANCIAL EVENT. PRESIDENT HOLLANDE
HAS SOME TRULY STUPID PLANS TO RAISE TAXES,
AS THE WEALTHY ARE VACATING. MORE
DISTRIBUTED MISERY (AKA SOCIALISM) LIES DEAD
AHEAD. TOTAL COLLAPSE IN CONFIDENCE
IS HAPPENING BY BUSINESS AND THE POLITICAL
ESTABLISHMENT. $$$

Major
French Economic indicators are flashing loud
sirens and glaring red lights. Few appear
to be paying heed. A reliable barometer of
their tangible economy crashed in September.
New car sales via registrations
collapsed by 18.3% from September last year
over the twelve months. Year
to date for the nine months, car sales were
down a whopping 13.9%, signaling an acceleration downward. The year 2012 is on track to
be the worst year for the car industry since
long before the financial crisis. Of the French
brands, market leader Peugeot Citroen declined
only 5% in sales, buffeted by the introduction
of its new sub-compact Peugeot 208. But year
to date, French brand car sales were down
a hefty 18.4%. Renault was wrecked, no other
words fit, as their sales plummeted by a stunning
33.4% for the month and 19.8% year to date.
The German brand cars also were also hit hard
in French sales. The parent Volkswagen (VW,
Audi, SEAT, Skoda)
fell 17.4%. BMW and Mercedes saw declines.
GM (Opel, Chevrolet) tumbled 20.8%, but Ford
crashed by 31.5%. Fiat was crucified, with
sales careening down by 38.4% in a wreck.
The pattern is confirmed by light utility
vehicles, an ominous sign for the private
sector and its investment environment. As
defined by under
5 tons in weight, their sales in France
fell 12.5% for the month, while industrial
vehicles (over 5 tons) did worse, suffering
a 20.1% fall. Look for Italy to be in the news soon for massive economic
declines.

The
Manufacturing Purchasing Manager Index (PMI)
in France declined to 42.7 in September, the lowest
reading since April 2009. Only Greece was lower, which lost 20% of its economy
over the last five years. France
has not garnered much attention over Southern
Europe and its PIGS basket case. The Jackass
has been warning about the mire in France for several months.
Even crippled Spain
outperformed France.
New orders were particularly hard hit, a harbinger
for pain to come in the French Economy. Lacking
new orders, manufacturers have reduced their
backlog at the fastest rate since March 2009,
when it last seized. The associated PMI employment
component fell for the seventh consecutive
month. Heat is rising in France within the labor market.

The
French Govt has proceeded to impose a harsh tax increase on all dividends,
incomes, and capital gains.
No wealth is safe, as it is needed to finance
the welfare state and the failure that surrounds
it. The nation combines brain-dead socialist
policy with the background bank insolvency
to create a nightmare. The misery will surely
be spread far and wide,
and evenly across the society, which is what
socialism is best at doing. The jobless rate
is at 10.6%, but youth unemployment is at
25.2% and rising fast. Over three million
people are out of work for the first time
since 1999. The confidence barometer of
small and medium businesses, which create
most new jobs, crashed in September to 84,
the lowest level ever recorded for the series,
going back to 1992. It has plummeted quickly,
once at 129 in April. The national economy
in France
is falling off a cliff. Watch the harmful
effects of raising taxes next, which could
ignite riots in Paris.
Austerity is no solution. In fact, there is
no solution except installing a Gold Standard
and liquidating the big banks, while hunkering
down in pillboxes. See the Zero Hedge article
(CLICK HERE).
Numerous top French properties have suddenly
shown up on the block for sale. The rich business
community is pulling out. See the France24
article (CLICK HERE).

◄$$$
GREECE
HAS VAST RESOURCES STILL, LOCKED IN GOLD AND
ENERGY RESERVES. AS THE EUROPEAN ELITE CONTINUE
TO BAIL THEM OUT, THEY WILL SEEK COLLATERAL
FOR THE LOANS. MUCH ARE NOT YET TAPPED OR COLLATERALIZED, BUT THEY WILL BE. GREECE MUST EXIT THE EURO,
RESTRUCTURE ITS DEBT, DEVALUE ITS CURRENCY,
AND EXPLOIT ITS RESOURCES BEFORE FOREIGNERS
ATTACH THEM AS COLLATERAL. THE RACE IS ON.
$$$

Greece
actually has massive untapped reserves of
gold, oil, and natural gas, few people realize.
The nation of Greece
is sitting on absolutely massive untapped
commodity reserves of various types. If the Greeks were to fully exploit
the natural resources under their feet, they
would no longer have any debt problems. Greece
is projected to become the leading gold
producer in Europe by
2016. In addition, Greece is now opening
up exploration of their massive offshore
oil and natural gas deposits. According
to industry reports, Greece is sitting
on hundreds of millions of barrels of oil
and gigantic natural gas deposits that are
worth $trillions. The nation has riches. What
it lacks is active working capital and freedom
from its debt.

Since
the depression began in Greece,
the Greek Economy has contracted by more than
20%. In April 2010, the unemployment rate
in Greece
was only 11.8%, but since then it has skyrocketed
to the 25.1% level. The Greek Govt
debt to GDP ratio is projected to hit 200%
this year. The nation needs to exit the Euro,
default on its debt, restructure that debt,
then devalue the Drachma currency, and attract
a gigantic swath of development contracts
that earn significant royalty and employ hundreds
of thousands of people. The process begins
with the Euro exit and debt default. The process
begins by turning on the wheels of capitalism,
turning off the reverse gears of socialism,
removing bureaucrats that obstruct progress, and arresting bankers that cut yet more deals to
gut the national wealth.

Massive
gold deposits lie in Greece.
The approval process of mining activity has
been reformed and fast tracked. Industry
analysts expect Greece will soon be the number one gold producing
country in all of Europe.
The Canadian and Australian companies involved
claim their projects will add about 425,000
gold ounces by 2016, worth $757 million at
a mid-$1700/oz price. In year 2011, the country
produced a mere 16,000 ounces. Greece is also putting on
the fast track some state property sales where
deposits are located. It is set to overtake
Finland
as the continent's largest gold producer within
four years. Due to urgency, the regulators
in Athens
have signed off on mine deposits kept on hold
for more than a decade by red tape and environmental
rules.

Greece
is also awash in crude oil and natural gas.
The nation sits on a massive undersea oil
and gas field which is gradually being estimated
in size. Also, sizeable energy deposits have
been identified in the western parts of the
country. Several foreign firms are rushing
to exploit these tremendous resources. The
Greek Govt has received
eight bids by companies in recent months to
begin test wells. Currently the nation produces
almost no oil or natural gas. Early estimates
suggest that the Gulf
of Patra might have 200 million barrels of crude
oil, and that another 80 million barrels of
oil lie in Ioannina,
and nearly 3 million off the coast of Katokolo. Furthermore, according to the United
States Geological Survey, in the sea between
Crete, Cyprus, Israel,
and Egypt, there are about 15
trillion cubic meters of natural gas and oil
awaiting exploitation. The resources are sufficient
to manage their national debt load, especially
if restructured.

TulaneUniversity
oil expert David Hynes believes that Greece could solve its entire public debt crisis
through development of its oil and gas discoveries.
He conservatively estimates that exploitation
of the reserves already discovered could bring
the country more than EUR 302 billion over
25 years. The last might be first, far
more promising than either Spain
or Italy. The key is to exit
the Euro before the foreign banker grappling
hooks tie a hold on these great assets. Look
no further than their natural resources for
a reason to explain such hesitation to push
Greece out of the EU. Many leading politicians
and bankers in Europe
probably are well aware of their gold, oil,
and natural gas. See the Economic Collapse
article (CLICK HERE).

◄$$$
ONE THIRD OF ATHENS
BUSINESSES ARE CLOSED DOWN AND SHUTTERED.
THE GREEK GOVT DEBT IS TWICE WHAT WAS PREVIOUSLY
ESTIMATED AT EUR 20 BILLION. THE BREAKDOWN
CONTINUES UNABATED AND UNADDRESSED. A FULL
COLLAPSE WILL FORCE THE EXIT FROM THE EURO
COMMON REGION AND BEGIN THE DEBT FAILURE CHAIN.
$$$

An
absolute economic collapse in Greece
is in progress. The description of depression
is too light, too soft, too minimizing to
describe what is happening in this globalist
vassal colony. One third of Athens
businesses have been shuttered. The banker
elite in Europe seek
to retain their Euro currency usage, and to
attach more properties, thus making preparation
for a greater disaster in collapse. The unemployment
rate in Greece
rose another 1% to 24.4%, which is only 2%
higher than in the United States. The state revenues are further
inhibited from tax collection, made worse
by the tax collectors themselves on strike.
A new report by Kathimerini
confirms that almost a third of all business
in Athens have now shuttered. It read, "The number of shuttered
shops on the capital's busiest commercial
streets, Panepistimiou
and Stadiou, also
hit a record high in August, reaching 34.7%
on Panepistimiou
and 42% on Akadimias, up 14% in the last six months." A vicious
cycle continues as fewer businesses operate
to hire fewer people, generating less state
revenue, encouraging less
businesses to open and so on, until
the entire country collapses in a heap of
worthless debt. To cap off the story, the
Greek Govt deficit
hit the reality wall, at double the expected
amount. It stands at EUR 20 billion. See the
Zero Hedge article (CLICK HERE).

◄$$$
EXITS FROM EURO MONETARY UNION COULD COST
$17 TRILLION IN FULL RIPPLE EFFECT TO THE
EUROPEAN ECONOMY EN MASSE OVER THE REMAINDER
OF THE CURRENT DECADE. THE RIPPLE EFFECTS
WOULD BE POWERFUL AND PREDICTABLE. ADD TO
THE LETHAL BREW THE AVALANCHE OF CREDIT LOSSES
FROM BOND DEFAULTS AND WRITEDOWNS. BOTH CREDITOR
NATIONS AND PRODUCER NATIONS WOULD BE HARMED
BADLY IN IMPACT. HOWEVER, THE REAL WORLD OPERATES
IN A DYNAMIC MANNER. THE EXITING NATIONS WOULD
REVERT TO THEIR FORMER CURRENCIES, DEVALUATE
THEM, AND ENJOY THE GREAT STIMULUS, TO BE
SURE AMIDST SOME CHARRED RUINS AND TRAMPLED
FIELDS. $$$

There
is no solution except to exit the Euro currency,
a true albatross that prevents any semblance
of recovery and restart. However, the cost
is being more accurately assessed in view
of its inevitability. The German think tank
Prognos, an economic research group, was commissioned by Bertelsmann
Stiftung to conduct
a study on the impact of a string of exits
from the Euro Monetary Union. The conclusion
was stark ugly and devastating, but one-sided.
The study estimated that a Euro exit by
Greece,
Spain,
Portugal, and Italy
would cut global GDP by EUR 17.2 trillion
($US$22.3 tn) and plunge the world into recession, with France suffering the biggest
loss. The cut to economic activity was
calculated in forecasts through year 2020.
A Greek exit alone would be manageable, but
must be avoided to forestall a domino effect
that would ensue. A chain reaction would be
unavoidable, leading to the departure of other
Southern European nations from the single
currency. My quick addendum is that depression
would be a certainty, since the current recession
already borders on depression in Western Europe
and North America.

The
researchers arrived at the bleak assessment
after calculated losses of bank creditors
were included which are deeply exposed to
the nations mired in crisis. They included
in the analysis the potential impact of a
Euro collapse on economic growth in the 42
most important industrial and emerging economies,
which comprise over 90% of the world economy.
The chain reaction would reach all Southern
European nations, and numerous global players
in trade. The extent of the eventual damage
ironically grows with each month, since defense
of the Euro and propping the big bank increases
the commitments into a losing situation.
This is the classic toss of good money after
bad. Aart De Geus, Chairman of the Bertelsmann
Stiftung's executive
board, warned "In the current situation
we have to make sure that the crisis in Europe
does not turn into a wildfire." It
will eventually turn precisely into a wildfire,
and when it does, the damage will be much
worse since Greece was not permitted to
default in 2010. In the United States, the big banks are considered too
big to fail. In Europe,
the Southern peripheral nations are considered
too big to fail. Same concept, same exposure,
same incremental commitments, and the same
outcome assured, with the same added losses
later. Kick the can down the road until it
turns nuclear and the road runs out.

A
Greek exit from the common Euro system would
lead to a loss of gross domestic product (GDP)
totaling EUR 164 billion, equal to EUR 14,300
per capita by year 2020. They calculated the
impact through devaluation of the new currency,
unemployment, and a sharp fall in domestic
demand. It would cost Germany EUR 64 billion
in credit writedowns
and EUR 73 billion in lost economic growth
between 2013 and 2020, the study said. But
that only amounts to 2.9% of German GDP. One
must question as forecast analyst if they
included any added boost to the Greek Economy
from a currency devaluation of the Drachma
once reverted. My guess is that is ignored.

The
impact of other countries leaving the currency
union would be more dramatic. If Portugal
exited, Germany would lose EUR 225
billion by 2020 from credit writedowns
amounting to EUR 99 billion. Global losses
in growth would add up to EUR 2.4 trillion,
with the US
lost sharing EUR 365 billion and China EUR
275 billion. If Spain were to exit as well, Germany would lose EUR 850
billion in GDP by 2020 after writing down
EUR 266 billion of credit. The US
would lose EUR 1.2 trillion in GDP, and the
42 countries under review would lose EUR 7.9
trillion. If Italy,
the EuroZone's third
largest economy, were to exit, the researchers
concluded that the situation would run totally
out of control. It estimated that Germany
would lose EUR 1.7 trillion in GDP with EUR
455 billion in credit writeoffs. German unemployment would increase by more than
one million by 2015. The biggest losers would
be France,
followed by the United
States, China,
and Germany. These are respectively
the creditor nations and the producer nations.
See the Spiegel article (CLICK HERE).

Again
as critical footnote, the research appears
to ignore the stimulus effect from the reversion
to the devaluated Greek Drachma, Spanish Peseta,
Portuguese Escudo, Italian Lira, and French
Franc.
The principal is basic in econometric analysis,
called dynamic scoring. The Western economists
are mostly hired harlots. They do not wish
to promote the benefit of dynamic reaction
to reverted currency devaluations. Consider
the Prognos research to be a worst case analysis with no positive
reaction to currency devaluation, whose arrival
would be obvious and basic. They would enjoy
new export business growth from the lower
currency rates, obvious amidst charred ruins
in the Southern European nations, matched
by damage in the producer nations who might
purchase much cheaper Greek wine (plus tambourines),
much cheaper Italian clothes (plus Lambourghinis),
much cheaper Spanish farm output (plus castinets),
and much cheaper French pharmaceuticals (plus
arrogance).

##
BIG BANKS CAUGHT IN VISE

◄$$$
THE WALL
STREET BANKS ARE UNDER TREMENDOUS ORDINARY
BUSINESS PRESSURE, WITH REDUCED INCOME AND
HIGH COSTS. THEY WILL BE PRESSURED TO BREAK
UP, CONSOLIDATE, AND FOLD. $$$

Chris
Whalen is a solid brave analyst who makes
statements that reflect the reality of the
banking sector crush. In a recent Bloomberg
interview, he spoke on stark terms of survival
pressures for the big Wall Street investment
banks. Whalen believes no Wall Street firm
is earning money on its bond inventory, since
bond yields are so puny. Ironically, Wall
Street is an important victim of the USFed
monetary policy, the destructive Zero Interest
Rate Policy. They must ordinarily rely
upon fees from investment banking, which have
dried up. Even trading profits are down, as
high frequency trading schemes dominate, and
private investors are not so available to
fleece in controlled swings. The large banks
will be forced to break up from internal stress
and absent income. The driver to the process
is cost, as the missing piece is income.
They will reduce the wages paid to executives,
fund managers, and trading desks, or else
they will suffer from the usual process of
dried vines. They will shut down entire business
segments. Half of Wall Street profit used
to be derived from the USTBond
carry trade in the past, which has been severely
reduced now that the 10-year yield is steadily
under 2% and the 30-year yield is steady under
3%.

My
choice is to point to the irony, how Citigroup
suffers from direct impact of ZIRP. They dismissed
Victor Pandit as
CEO. A great consolidation is coming to Wall
Street that must be disguised. So do the other
big banks suffer, one after the other report
strained on earnings.
They must hide their derivative losses and
wrecked mortgage assets. The JPMorgan profit
was engineered with more skill, more deceit,
like showing positive positions but not losing
positions. No details will be offered here
since only my deep instinctive reaction from
their past pattern.

The
bigger question is whether the new top executives
will preside as caretakers until Citigroup
is dissolved, with major parts taken by Goldman
Sachs and JPMorgue. The biggest banks might soon start to act like undertakers.
My suspicion is that Citigroup is being set
up to undergo a metamorphosis that is exploited,
like with a black hole created on some derivative
losses, like some vanished private accounts.
It might merge portions of its vast sprawling
unmanageable business segments with other
big banks. The firms are shifting their risk
and hiding their losses in a grand shell game.
Wall Street urgently needs a garbage can to
fill with toxic paper and vast derivative
acid. The opportunity is there to steal private
accounts. It is not just Morgan Stanley that
is likely to steal private accounts, but Citi and even Merrill Lynch. To wit, notice that the Morgan
Stanley quarterly statement did an ugly swing
to a $1 billion dollar loss from a respectable
$2 billion profit a year ago (3Q2012 versus
3Q2011). Net revenue was cut almost in half,
from $5.3 billion down from $9.89 billion
in the third quarter last year.

◄$$$
MORGAN STANLEY CONTEMPLATES PAY CUTS FOR ITS
BLOATED OVERPAID STAFF. THE INVESTMENT BANKING
BUSINESS IS DRYING UP LIKE A LAKEBED IN AN
ARIZONA DESERT. $$$

The
investment bank will examine a further round
of retrenchment next year. In a surprising
bout of frank honesty, CEO James Gorman admitted,
"There is way too much capacity and
compensation is way too high. As a shareholder,
I am sort of sympathetic to the shareholder
view that the industry is still overpaid.
The current Wall Street management is a little
tougher minded about [keeping compensation
strong to retain good workers] and shareholders
are certainly tougher minded." The
investment banking business has largely dried
up. The stock brokerage business is dormant,
although a few million private accounts lie
around waiting to be stolen, whose owners
are fully asleep to the aggravated risks made
known by the MFGlobal
thefts. The extreme drag is painful and obvious
from the entrenched USEconomic
recession and the European debt collapse.
Hard hit is the trading volumes in bonds and
stocks. The industry is also grappling with
new regulations passed in the US in the wake of the financial
crisis, forcing less leverage and more accounting
for derivatives. Wall Street banks have cut
over 20,000 jobs so far this year, according
to recruitment firm Challenger Grey &
Christmas. Look for those cuts to continue
unless revenues pick up. The main revenue
source for the big banks is the carry trade
from USTreasurys,
which needs a few computers and a handful
of humans, not a big staff. See the UK Telegraph
article (CLICK HERE).

◄$$$
A CLIENT REPORTED STRANGE ASPECTS FROM A GREATER
SAN FRANCISCO BRANCH OFFICE FOR BANK OF AMERICA.
SOME ASTUTE OBSERVATIONS WERE MADE. STRESSES
ARE GREAT, SO IS SECURITY. MORE ACCOUNTING
FRAUD IS BEING DONE, AS FUTURE AMORTIZED PROFIT
FROM ADJUSTABLE RATE MORTGAGE ORIGINATION
POINTS IS BEING BOOKED AS IMMEDIATE CASH PROFIT.
$$$

A
Hat Trick Letter went recently to a Bank of
America branch with a friend who wanted to
refinance his mortgage. He left with more
than a few observations. Armed guards are
now posted outside the branch, the first time
ever seen. The company providing the security
is G4S, a foreign company. The Silicon
Valley community is not strewn with abject
violence, as the average house price is about
$700k to $800k and the gross income could
be at a minimum $150k. Palo
Alto is tranquil. The curious wonder what
risk is perceived on the inside. The population
mix is 50% white plus 50% Asians, composed
of Chinese, Indians, and Koreans, the usual
Silicon Valley crowd.
The heightened security measures indicated
a threat perceived but not yet visible, a
surefire sign of things to come.

The
business side was equally alarming. Bank of
America (BAC) is still offering adjustable
rate mortgages (ARM) tied to LIBOR, subjecting
clients to the same nasty risk as a few years
ago. This begs the question whether the offering
is even legal. Here is the juicy part. The
bank is making money via refinance, not by
dumping the mortgages to the USFed
or on the Fannie Mae doorstep, but rather
via upfront points. Most fixed or ARMortgages
require a 1% origination point paid upfront.
However, the twist is that the point is not
paid in cash at closing like in ordinary times,
adding to the closing cost of lawyer fee and
title tax, etc. The point is added to the
principal, and surely booked as profit.
BAC for a $500k loan would record the loan
as $505k, and book the $5000 as present income,
even though it is amortized. If the home loan
does not perform, then BAC must back out the
recorded present profit later.

This
is accounting fraud. Bank of America is recording
forward amortized cash flow as income which
carries with it extreme risk. The
home loan underwriting it not lunatic like
before. The loan to value is set at
least 80% and thus not subprime lending. At
other big banks, such might not be the case
throughout the country. Hence, BAC is putting
people back into ARMs. If the housing market
prices drop or mortgage rates rise, a lot
of people will land themselves in trouble
again. If the homeowner loses the job with
income, again the loan will enter the foreclosure
track and the 1% point must be backed out.
The bank will return to a sudden acid reflux
event, all over again.

◄$$$
IN ITS FINANCIAL FILING, FANNIE MAE SHOWED
IT IS TAKING FEWER LOSSES ON R.E.O. SALES
ON ITS BOOKS. BUT THE SHORT SALES CONTINUE
TO RACK UP MULTIPLE $BILLIONS IN LOSSES. LESS
THAN HALF THEIR INVENTORY IS EVEN ON THE MARKET
FOR SALE. VERY FEW HOMES ARE PULLING IN RENTAL INCOME.
BANKS ARE LOSING MONEY AT A RAPID RATE STILL.
$$$

The
Fannie Mae snapshot is evidence of continued
distress, but portrayed as a minor success.
Any financial firm that recovers only 65
cents per dollar on loans is in desperate
shape. And it on a widespread basis, the firm
will surely go bankrupt. The Govt
Sponsored Enterprise announced an improvement
from disastrous to horrendous in its recovery
of home loan balances. Fannie Mae & Freddie
et al (includes the gaggle of ruptured FHA
agencies) recovered an average 65% of the
unpaid principal balance from REO sales in
2Q2012. That is an improvement from the low
of 59% at the beginning of 2011. But even
this metric varies widely across the country.
It was able to recover an average 78% of the
unpaid principal through REO sales in Texas,
but only 50% of the original mortgage balance
in Nevada
sales. Their recovery rate reflects directly
the wreckage of the regional housing markets.
Be sure to know that whatever is revealed
for Fannie Mae on the home inventory processing,
also occurs for the big banks. The Fannie
Mae window offers a glimpse at the rotting
big bank book of portfolios of mortgage assets
held more widely across the big banks.

Only
half of the previously foreclosed homes held
under the Fannie Mae warehouse are on the
market for sale or prepared for sale. The
remaining properties are currently stuck in
some step of the foreclosure system. Some
are surely in such bad shape as not to be
sellable. Fannie officials said 23% of
its more than 109,000 repossessed homes are
currently available for sale. Their inventory
is actually down by 28% from the end of last
year. Some homes are pending in sale. An offer
has been accepted on another 19% of homes
in FNM inventory, and 11% have an appraisal
in progress. But 47% of its inventory is unable
to be marketed (think nasty sabotage, disrepair,
neglect).

Consider
that a large slice cannot be sold due to improper
titles, absent titles, duplicate titles tied
to mortgage bonds, and more corruption. In
the Fannie back yard they will be buried,
but not without the opportunity to gather
rental income later on. Fannie officials
said another 13% of its properties remain
occupied by the borrower, the holder of the
home loan. The eviction process just had
not been completed. The rental phenomenon
has not expanded much, not yet. Only 8% of
its inventory, fewer than
9000 homes, are being rented as part
of its piloted Tenant in Place Program or
the Deed for Lease Program. These programs
enable the homeowners to rent their own homes,
not leave, after handing over title to Fannie
Mae, but probably a broken heart. See the
Housing Wire article (CLICK HERE).

◄$$$
BARCLAYS HAS MADE AN ASSET GRAB. THE NEW PATTERN
IS BECOMING CLEAR, TO SEIZE THROUGH ACQUISITIONS
THE AVAILABLE DEPOSIT BASE IN ORDER TO STAVE
OFF GROSS INSOLVENCY. THE BOLSTER TO THE EQUITY
BASE IS NOT ATTRACTING ANY ATTENTION. THEIR
INSOLVENCY IS AN UNNOTICE UNADDRESSED CANCER.
$$$

Barclays
has set the stage to acquire ING Direct with
GBP 10.8 billion (=US$17.4bn) in assets and
GBP 5.6 billion in mortgage assets. They pursue
deposits while risking more mortgage losses
in a gamble. The ING online segment is a losing
business. The added 1.5 million clients will
shore up the Barclays client base, while also
improving funding for its consumer operations.
Andrew Lim is a London-based analyst at Espirito Santo Investment Bank. He said, "The deal
is more about the acquisition of a deposit
base which reinforces the funding of the UK retail operations, which
will subsequently be ring-fenced." He
calls the deal is an attractive bolt-on acquisition,
in his words. The Barclays pampered staff
is probably overpaid, adding to costs, requiring
income. The acquisition is the first since
Antony Jenkins, the former head of Barclays
consumer bank, took over as CEO in August
from Robert Diamond, who departed in disgrace.
Hidden from awareness by the analyst community
was the grab of a sizeable swath of depositor
equity. The insolvency of the big banks is
never discussed. This deal will soothe that
insolvency by adding to the deposit base,
like fresh blood infusions to a gaunt debilitated
patient.

Barclays
has fortified its conglomerate segments by
acquiring assets from rivals at a discount,
since the onset of the financial crisis. It
acquired the banking arm of insurer Standard
Life out of Edinburgh
Scotland for GBP 226 million
pounds in 2009. In March 2011, it acquired
the credit card assets of online lender Egg
from Citigroup. These moves add to the income
and cash flow. These moves also address the
insolvency of Barclays, and soothe the condition.
Yet the process assumes new operational losses.
Recall that insolvency plus illiquidity means
bankruptcy. The Barclays acquisitions are
forestalling pressures of bankruptcy by adding
to liquidity in cash flow.

The
ING Direct business lost GBP 89 million pounds
before tax in 2011. It will be folded into
the Barclays retail
and business banking division. Some 750 employees
will transfer from the Dutch firm as part
of the deal. ING said the transaction frees
up 330 million Euros in capital on their end.
The lender has been selling assets as it seeks
to repay the Dutch state aid received during
the financial crisis. The Dutch company claims
the sale will not affect its core Tier-1 capital
ratio, a measure of financial strength. Barclays
expects that in order to make ING Direct profitable,
substantial investments must be made in transforming
it into an internet bank with a full product
range. Usually that means cash spent, unsure
where from. Research from JPMorgan Chase indicate that a clash could come
with the firm's current priorities of strengthening
its capital buffers ahead of stricter regulatory
demands and repaying state aid.

Another
asset sale took place early in 2012. In February,
the Dutch financial services company sold
its US
online bank to Capital One for about US$9
billion to meet European Union conditions
for accepting state aid. ING received a EUR
10 billion bailout in 2008, and has repaid
EUR 7 billion, plus EUR 2 billion in interest
and premiums. Last month, ING sold its Canadian
online bank to Bank of Nova Scotia. Their
online banking operations in Australia,
Austria,
France, Germany,
Italy,
and Spain will continued
unaffected. One must wonder if bad judgment
is being exercised, since ING generally is
a rotting derelict at sea with holes in most
every compartment, adrift in the global financial
crisis seas. Barclays is taking a big risk,
a seemingly bad risk. See the Business Week
article (CLICK HERE).

◄$$$
ALLEGATIONS OF SYSTEMIC FRAUD HAVE COME TO
ROYAL BANK OF SCOTLAND. WITH THE PUBLIC
FOUNTAIN TIED TO THE UKGOVT NO LONGER AVAILABLE,
THE BANK HAS RESORTED RECENTLY TO ATTEMPTS
TO SWINDLE LARGE PROPERTY BORROWERS. LAST
SUMMER THEY USED PHONY A.T.M. GLITCHES TO
SKIM ON CASH FLOW. THE R.B.S. FIRM IS NOT
SO MUCH A BANK AS A CRIME SYNDICATE NEXUS.
THE BIG STATE-OWNED BANK HAS BECOME A CENTER
FOR FRAUD OF MANY TYPES. WATCH THE COURT CASES,
WHICH WILL MAKE GREAT THEATER. $$$

RBS
is being accused of swindling large scale
property borrowers in rather obvious glaring
attempts to haul in properties in not so complex
paper shuffling games. The tactics are more
successful in Central America, but not in
London. RBS is trying to conduct shell games and title thefts, using
classification devices that are almost in
plain view. Two separate civil high court
actions and one on-going criminal action are
on the verge of revealing powerful evidence
of concerted efforts within RBS to defraud
their own customers. Sources report that
at least 15 RBS staff are
the subjects of a surveillance operation by
the City of London
Police, to detect the fraud and to gather
admissible evidence. In one or more cases
soon to find the courts, RBS is accused of
actively working to defraud retail clients
with easily visible schemes. The case documents
outright systemic fraud within RBS,
aided and abetted by local property agents
and administrators. Being under UKGovt
ownership, the managers might believe they
are immune to prosecution, within the shadow
of the Fascist state. My contention is that
the UKGovt bought
a major stake in RBS because it was both bankrupt
and the source of deep fraud. RBS is like
JPMorgan, Bank of America, and Fannie Mae
rolled together, reeking of comparable corruption,
but smaller.

Another
high profile case involves a hotel redevelopment
project using an RBS credit line of GBP 5
million. The project was abruptly halted when
suddenly RBS used the opinion of an independent
property agent (plain collusion) to massively
undervalue the property. RBS used the bogus
assessment to designate the hotel a distressed
asset, thus declaring the project insolvent.
Administrators then colluded to sell the property
to the RBS distressed assets division at West
Register for the dubious sum of one British
Pound. The biggest odor emitted came from
the procedure that approved the assessment,
reclassification, and move to then seize in
sale.

In
November last year, entrepreneur developers
Innes Berntsen and
Chris Richardson initiated High Court proceedings
against the NatWest subsidiary of the Royal
Bank of Scotland.
The plaintiffs claimed wrongful termination
of its RBS bank facility for the development
of a four-star Kent
hotel. The funding was withdrawn nine days
before the hotel (built in the 1880s) was
due to open after redevelopment. Clearly
RBS wishes to seize the hotel ready for business
after all the heavy work was completed.

Just
two months ago, financial blogger Ian Fraser
reported that Royal Bank of Scotland had shifted billions
of British Pounds of commercial property debt
from its banking book into West Register,
its subsidiary repository. With this blatant
accounting ruse, the bank avoided declaring
losses on toxic loans decreed to have gone
bad. With sleight of hand, the bank converted
liabilities into assets. Such commercial real
estate con games and document shuffling appears
to be a primary strategy used by RBS chief
executive Stephen Hester in the recovery project
to bring the big bank into solvency. Recall
the summertime ATMachine glitch (reported by the Hat Trick Letter), which
enabled RBS to grab a considerable amount
of interest from cash that sat unavailable
to its depositor owners. The skim glitch was
never fully identified, but it was profitable,
or at least generated significant cash flow.

The
Slog has posted endlessly about the devious
activities in bank accounting by the big London
banks. RBS has been fingered several times
by the Slog website over the last two years
as the most dodgy, toxic, and suspicious banking
asset taken on by the UKGovt
after the 2008 disaster. Regard the motive
for the property fraud, accounting fraud,
and customer fraud as being deep insolvency
and sitting on the edge of ruin. For every
dastardly fraudulent deed caught, expect four
or five not detected or brought to light.

◄$$$
MONEY MARKET FUNDS POSE AN IMMINENT RISK.
APPARENTLY THE DRAIN CONTINUES ON BANK SECTOR
EQUITY. EXPECT THE STRICTURES ON MONEY MARKET
REMOVAL OF FUNDS TO TIGHTEN. DEPOSITS AND
MONEY MARKET FUNDS ARE THE LAST REMAINING
SLAB OF EQUITY SITTING IN THE WRECKED BANKS.
THE RISK IS FOR THEM TO BE STUCK, THEN STOLEN,
OR CONVENIENTLY VANISHING. QUICK REMOVAL OF
M.M.FUNDS BY CUSTOMERS WOULD EXPOSE BOTH THE
INSOLVENCY AND CORRUPTION OF THE BIG US-BANKS.
THUS THE URGENT NEED TO STOP WITHDRAWALS.
$$$

Again,
the mass of over $3 trillion in customer money
markets has an awkward classification, not
bank equity, not invested funds, but important
asset for the firm. Some level of desperation
is apparent by the Secy
Treasury Geithner.
Before the meeting of the Financial Stability
Oversight Council of regulators, Geithner
told members to prepare for harsher money
market fund (MMF) reforms even if the SEC
remains inactive on the issue. The USDept
Treasury and the SEC are at odds. He indicated
the likelihood that the largest of the funds
could fall under closer USFed supervision if necessary. By that he meant if the bank
runs occur from rapid MMF withdrawals.Geithner issued
a formal letter to the council member agencies,
comprised of the Securities & Exchange
Commission, the Commodity Futures Trading
Commission, the US Federal Reserve, and other
firms involved in financial or markets supervision.
In it he asked council staff to begin drafting
a formal recommendation immediately, which
would be voted on in November. An inner battle
is being waged, as SEC Chair Mary Schapiro
is moving somewhat aggressively to publish
reform proposals. The full SEC commission
is not supporting her every wish, thus denying
her a majority.

SEC
spokesman John Nester revealed the conflict
and desperation building. He said, "The
Chairman [Shapiro] has long believed that
addressing the susceptibility of money
market funds to destabilizing runs is a critical
piece of unfinished business from the financial
crisis. That is why she has advocated
for reforms to bolster the structure of these
funds. She is very pleased that this important
reform initiative is moving forward."
The money market funds are situated in big
investment banks and mutual funds, subject
to SEC directives since not in commercial
banks. They are not ordinary bank accounts
or certificates of deposit. The SEC will repeat
their initiatives. The Investment Company
Institute is the trade group that speaks for
the mutual fund industry. In late August,
Schapiro was forced to back down and concede
defeat, but expect it to be temporary. The
ICI commented at the time, "We have
strongly opposed the structural changes to
money market funds under consideration at
the SEC, because of the adverse consequences
of these proposals for investors, issuers,
and the economy."

However,
Geithner will press
onward since the Syndicate prefers power games
not in the public interest. He believes that
further reforms to the MMF industry are essential
for financial stability. My view is that fast
removal of MMFunds
would expose the banks for insolvency and
corruption. The keyword indicates the desperation
to avert a bank run, since the big banks are
hollow insolvent dry timber laced with fraudulent
vines. He is urging the full council to take
action. He wrote, "The Council has
both the responsibility and the authority
to take action to address risks to financial
stability, [even if the SEC] fails to do so."
Geithner
has often reminded the financial markets generally
that the USTreasury
guarantee of more than $3 trillion of MMF
shares, along with a series of liquidity programs
by the USFed, and support from many mutual fund companies, prevented
a panic marred by a raft of withdrawals during
the ongoing financial crisis. He is full
of feces, since narco
money laundering saved the big banks during
the climax of the crisis. The Financial Stability
Oversight Council must decide on the measures
directed at non-bank financial institution
risk, and whether any large insurance funds
should be designated as systemically significant.
The firms are not eager to be classified as
part of institutional risk, since they had
little if any role in the crash of the banking
system. Also, such designated firms would
require expensive additional safeguards such
as additional precautionary reserves and frequent
reports, even on-site examinations, by regulatory
authorities.

Geithner is relentless, which reveals the urgency
in desperation. He regards the MMF industry
can potentially pose a threat to US
financial stability. This view reinforces
the notion that the financial sector is insolvent,
and MMFund runs
would undercut liquidity, resulting in quick
bankruptcy failures. The MMFunds
are the last remaining slab of equity. He
pursues supervision of such firms by the Federal
Reserve, which would give the USFed
board authority to impose enhanced prudential
standards. He talks of reforms, of protection
to investors, of safeguards to the economy.
But he is a skilled liar. He wishes to avoid
a bank run that results in exposure of deep
corruption within the US
big banks. See the FOREX Live article (CLICK
HERE).

◄$$$
THE NEW F.D.I.C. RULE REVERTS TO $250K IN
DEPOSITOR INSURANCE, FROM UNLIMITED CURRENTLY.
THE BURDEN WILL FALL ON THE USFED AND ITS
VAST BOND MONETIZATION TO FILL THE GAP, OR
ELSE NEGATIVE USTBILL RATES COULD ARRIVE.
THE NEW RULE WILL PUT MORE PRESSURE ON THE
LAST SLAB OF MONEY MARKETS. THE US-BANKING
SYSTEM IS STUCK IN A VISE ABOVE A PRESSURE
COOKER. $$$

The
new banking rules present a small glitch.
On December 31, 2012 the unlimited FDIC insurance
expires on non-interest bearing transaction
accounts. It will then revert back to $250k
per account. Currently there is about $1.6
trillion in deposits that fall under this
category. The irrepressible Tyler Durden expects
virtually the entire amount in new deposit
liabilities will have to be created from the
QE box, the fountain of bond creation to infinity.
The challenge is to foresee how those account
holders will react, and whether they will
the exit the deposits, once they realize the
assets are unsecured bank credit risk. For
sure, great pressure will sudden be placed
on the money market funds. Durden wonders
aloud if a possible consequence might be
negative USTBill
rates as far as the eye can see. That
would cause quite the commotion and controversy,
as the massive bank warts would be impossible
to conceal. The chart below shows that notional
of deposits backed by FDIC unlimited insurance,
which would be affected. See the Zero Hedge
article (CLICK HERE).

##
USDOLLAR DEFENSE

◄$$$
THE UNITED STATES NATION, THE USGOVT, AND
THE USECONOMY ARE STUCK WITH THE USDOLLAR
THROUGH THE COMPLETE IMPLOSION. ADVANTAGE
AND PRIVILEGE HAVE BEEN REPLACED BY BURDEN,
BALL & CHAIN. $$$

By
virtue of its global reserve status, the USDollar
is engrained in international contracts, foreign
accounts, medium for savings, and more across
the world. The United States as a nation will have greater difficulty
is moving away from the USDollar
than Greece will in abandoning
the Euro currency. The US wishes to create a new Treasury Dollar, a new
Republic Dollar, whatever the name. But it
cannot. The currency is entrenched across
the world in jurisdictions the USGovt cannot
begin to control. The extent of US$ lacing
within global contracts is broad, extensive,
deep, and uncontrollable. It is the great
credit card, the device for consumer excess,
the great privilege of counterfeit, the open
credit line to wage war, the business card
of newfound fascism. The USDollar
has become a noose and millstone around the
nation's neck. It cannot escape its own once
dominant currency, due to external factors.
Foreigners will not permit the US
to make a new better dollar. The American
Empire will be strangled by the USDollar,
with no opportunity to escape, and eventually
suffer a debt default. The Third World awaits the nation, with painfully pathetically little awareness.
Within the Dome of Perception, all that is
seen is power, strength, and reflections of
the past glory days. Not reality.

◄$$$
DEVOTION TO WAR AND CONSISTENT WAR COSTS KILLED
THE USA AS A NATION IN A POWERFUL PROCESS THAT BEGAN
IN THE 1970 DECADE. THE INTELLIGENCE AGENCIES
HAVE THE DOMINANT HAND IN DESTROYING THE NATION.
THEY DO NOT SECURE THE NATION, BUT RATHER
EXPLOIT THE NATION, EXPAND A PRIVATE SYNDICATE,
AND ASSURE THE CERTAIN DOWNFALL. THE ECONOMIC
IMPACT IS DEVASTATING FROM GUTTING ITS INCOME
SOURCES. DEPENDENCE UPON ASSET BUBBLES AND
INFLATION HAS TURNED INTO A WRECKING BALL.
THE NATION IS LOST, DECEIVED, BLIND, AND POOR
AS IT FORCED TO ACCEPT MONETARY HERESY AND
AGGRESSION. $$$

This
costly theme is not popular, nor is it even
recognized by supposed financial experts.
Too many have been co-opted, with purchased
brain stems, compromised thought, and accepted
dogma. The problem that led to the demise
of the American Empire began with the Vietnam
War. It was started by the CIA, when the Boyz assassinated Diem and then set up the false flag Gulf of Tonkin event. The Vietnam War was launched, producing a meat grinder
of a war where over 50,000 men died, in a
war that was not waged to be won. See the
Sam City story where warehouses of missiles
could not be attacked, on orders from the
Chief of Staff. The elite wanted military
sales, contract kickbacks, and to capture
the Cambodian Triangle narcotics ring.
As the years pass, the Jackass opinion is
that capture of Asian narcotics was a primary
objective in the war. Bear in mind that more
bombs were dropped in Laos
and Cambodia than in Vietnam, an astonishing fact. The list of extreme ugly events almost all involve the CIA.

The
most recent egregious event was the bomb incident
in Oslo Norway
in early 2011. My research indicated that
refusal by the Norwegians to invest their
$1.5 trillion sovereign wealth fund in London
banks prompted vengeance by the CIA and MI
security goons from London, followed by a typical lone gunmen story that reeks of Lee Harvey
Oswald deceptions all over again. The US Intelligence
groups had a hand in the overthrow of Libyan
dictator Qaddafi. The target was the Libyan
144 tons of gold bullion held in London banks, which was stolen and will never be returned. The CIA
has grown to become the largest and most dangerous
vile criminal organization in modern history.
They operate under protection of the USGovt,
USMilitary, USBanks,
USPress, USPharma,
with no checks & balances, no enforcement
of law, in a complete orgy of violence, influence,
and flexed power.

On
an economic slant, the inflation problem started
with the Vietnam War impact from USTreasury
Bond finance, in monetizing the war costs. The Jackass remembers full well the first $1 trillion
in debt after numerous annual deficits were
racked up, during my college days. The nation
was rocked by the sudden conversion from creditor
nation to debtor nation in the 1970 decade.
The trickle down from destructive enterprise
within the supply chain halts quickly, unlike
for constructive enterprise. The job growth
and economic development from war (defense)
spending is a fleeting illusion. War is often
the great infrastructure agent of change.
In the US case, it is the cause of
capital hemorrhage that has contributed mightily
to the ruin of the nation. In the last decade,
the Fascist Business Model has spawned the
concept of endless war, motivated by endless
defense against an exaggerated enemy, that has racked up at least $3 trillion in costs. The
benefits are difficult to cite. The ravaging
costs are simple to detect. Tens of thousands
of paraplegics move around the US without arms or legs, even in special sport
events. The trickle down benefit could be
that the medical prosthetic industry is doing
a banner business. The Jackass is a patriot
from the older definitions, based on love
of country, devotion to free enterprise and
free markets, and conformity to the Constitution.
Such direction is now considered terrorist.

The
consequences on the economic front were profound
and irreversibly damaging. The inflation
led to the offshore outsource of US industry, starting with Intel in 1984.
Then came important
labor union victories, for cost of living
raises. Then came
the lunatic notion of clean industry directed
by the mature advanced sophisticated financial
sector. Its only true ingenuity was shown
in the ATM machine, certainly not in leveraged
exotic contracts. During this time, the environmental
movement imposed new costs to maintain clean
air. Industry left for Asia.
The United States desperately required income sources,
but was stuck with the financial fascination
that turned into speculation. Individuals
began to own retirement accounts, when the
USGovt offered tax benefits. The entire movement
led to dependence upon asset bubbles. The
bust was seen in 2000 with the tech telecom
disaster, followed by the housing and mortgage
wreckage in 2007, followed by the fatal decline
of the US banking sector. The fatality
was evident with Lehman, Fannie Mae, and AIG,
which gave the TARP fraud and recently the
endless Quantitative Easing. The nation is
dependent upon Weimar
printing press of worthless baseless money,
with little realization of its toxic and destructive
nature. The nation celebrates free money,
having lost industry from devotion to war.

The
Wall Street frauds are in the $trillions,
but are sustained with no significant prosecution.
The wars continue to assure crude oil supply
and narcotics production and control in a
magnificent display of vertically integrated
business in global monopoly. The big US
banks are heavily dependent upon narco
money laundering to survive, perhaps the dirtiest
of secrets kept from the US public.

In
summary, the pervasive actions by the US
intelligence agency and longstanding devotion
to war killed the United States of America.
Half of the entire $16 trillion in USGovt
debt accumulated since 1960 is from war.
The main effects have been inflation, lost
jobs, forfeited industry, gutted households,
weakened labor unions, constant blather of
propaganda by the US
press, subservience of the USGovt officials
to Wall Street and the Intelligence community,
exported bond fraud, global instability, and
the flourished enterprise of narcotics monopoly
controlled by Langley. The 911 events solidified the power seizure by the US Intelligence
helm, in a bloody coup d'etat
still not widely recognized. The nation is
deceived but awakening. The nation is encouraged
to hate whatever enemy is convenient for the
day. The ethical and moral fiber of the nation
has been lost, a reliable fascist trait. What
awaits the vast sprawling security agencies
in their ascendancy to power is a fascist
state with marxist
threads in a martial law atmosphere, better
described as a modern sophisticated Third World nation. Next comes the nightmare.

◄$$$
CHINA
OPPOSES THE USDOLLAR GLOBAL RESERVE STATUS.
CHINA'S CURRENCY FORAY AUGURS GREAT GEOPOLITICAL
STRAINS. THE UNITED STATES HAS ABUSED ITS
PRIVILEGE. GLOBAL REACTION IS WELL ALONG IN
DEVISING A NEW GLOBAL FINANCIAL FOUNDATION.
THE CHINESE STRIVE TO GAIN RESPECT AS LEADERS,
BUT MUST ENDURE THE RISK OF INTERNAL INSTABILITY
THAT COMES FROM A CONVERTIBLE YUAN CURRENCY.
THEIR POLITICAL SYSTEM IS AS OUTMODED AS THE
USDOLLAR. $$$

How
40 years turns the tables. Let the Jackass
state that THE USDOLLAR IS THE GLOBAL RESERVE
CURRENCY, BUT IT IS THE NOOSE AROUND THE AMERICAN
NECK ON THE GLOBAL GALLOWS. In 1971, then
Treasury Secy John
Connally famously said "It is our currency and your
problem." The quote went down in
history, and spawned huge resentment. The
comment marked recognition that the United States was fully willing
to abuse its position and privilege as custodian
to the global reserve. The indulgent nation
converted the USDollar
into a reckless consumer credit card, and
worse, a line of credit for expansive aggressive
war in grotesque misadventures.

Frustrated
with what it sees as the USGovt malign neglect
of the USDollar,
China
has been effectively promoting the cross border
usage of its own Yuan currency, also known
as the renminbi
(people's money), in trade and investment.
The motive is two-fold, both commercial to
reduce transaction costs for Chinese exporters
and importers, and aggressively strategic.
The Beijing leaders have
been openly vocal, claiming that the displacement
of the USDollar will reduce volatility in energy costs and commodity
prices, as well as more importantly removing
the exorbitant privilege the United States enjoys as the issuer of the reserve
currency. The Chinese strategists consider
the post-war international financial architecture
China as hopelessly outmoded. It is being scrapped,
without much global awareness.

ZhaXiaogang,
a researcher at the Shanghai Institutes for
International Studies, said Beijing wants to see a more balanced international
monetary system consisting of at least the
Dollar, Euro, and Yuan and perhaps other currencies
such as the Yen and the Indian Rupee. He believes
that true competition among major currency
issuers and a wider menu of options when investing,
trading, or seeking a store of value would
better serve the world economy. Zha
argued, "The shortcomings of the current
international monetary system pose a big threat
to China's
economy. With more alternatives, the margin
for the United
States would be greatly
narrowed, which will certainly weaken the
power basis of the US."
The comments by Zha
were delivered in a white paper prepared for
a seminar in Bahrain
this month in the study of currency geopolitics
organized by the Intl Institute for Strategic
Studies, a London
think tank.

The
enduring global financial crisis, the existential
threat to the Euro currency, the USGovt facing
the fiscal cliff, all against the backdrop
of the Chinese ascendancy and continued development
of other emerging markets, is prompting policymakers
in the West to question the current monetary
order. Change is in the air for relations
with the USDollar.
The supposed analytic experts claim no obvious
alternative to the USDollar
exists for now, but a new trade settlement
system is evolving outside the sphere of American
and British influence. These experts have
their eyes closed to developments.

The
Chinese leadership finds itself in a grappling
bind. Opportunities clearly exist in using
the Yuan currency beyond its borders. The
powerful industrial advent of China
enables the many bilateral trade deals with
major partners across the world. However,
change can cause instability within China. The relaxing of capital controls is the
main precondition for reserve currency status.
Foreigners must be able to reinvest their
accumulated Yuan in China's securities markets. They must be able
to convert freely to other currencies as needs
dictate in other nations. Yet allowing
market driven money flows to drive exchange
and interest rates would weaken the tight
grip held by the ruling Communist Party on
main economic levers, potentially sowing the
very instability internally to the Middle
Kingdom. The financial system has become
complex, with abused privilege from lack of
US derived income, with consequence to loose
monetary policies, with resentment against
US hegemony (as seen with Iran), and with
accommodated bond fraud in global export.
See the UK Reuters article (CLICK HERE).

◄$$$
PANAMA
HAS MADE NOISES TO USE THE EURO CURRENCY.
THE TINY NATION IS CRITICAL IN THE AMERICAN
HEMISPHERE FOR BANKING AND CANAL COMMERCE.
IT IS WHERE THE NARCO BANKERS ENJOY DETENTE.
$$$

Panama wishes to introduce the Euro as legal
tender alongside the USDollar,
President Ricardo Martinelli
told German Chancellor Angela Merkel during
a visit to Europe last
week. The leader strives to broaden the currency
used in legal circulation, which at present
is exclusively the USDollar.
The greenback faces competition, as it slowly
is isolated before global shun and rejection.
My belief is that Panama will abandon the USDollar,
revert to the Balboa currency, but widen the
Euro usage in banking functions. It will
be interesting to observe how the USDollar
loses ground in this key spot in the Americas,
so close to WashingtonDC
and New York, but so far. See the Reuters article (CLICK HERE).

The
United States
gave up control of the Panama
Canal in 1999. In order to create peace among
important powerful factions in conflict, the
bankers of Panama made decisions
to use the USDollar
in commerce. Part of the compromise was sending
Noriega to prison, not to the execution chamber.
Their banks use multiple currencies widely.
Look next for the beleaguered USDollar to compete against other currencies in the Latin
American banking haven. This is no slouch
country, although tiny with 3.5 million people.
The city of Panama in
the Republic of Panama, as it is referred to by
the interior inhabitants, serves as the Swiss
banker of Latin America.
It contains hundreds of banks, ten times as
many as Costa
Rica. Panama is where the US Narco money meets the Colombian Narco
money, which meets the Import-Export Market
money from the Canal.

##
IRAN IN PRESSURE COOKER

◄$$$
IRAN
IS NOT A THREAT TO THE WEST, AS THE PROPAGANDA
HAS HIT HIGH PITCH ONCE AGAIN. ALL PAST CLAIMS
HAVE PROVED INCORRECT. ALMOST NOTHING WAS
LEARNED FROM THE PREVIOUS DECEPTIVE CHAPTER
CONCERNING IRAQ. THE CRIME BY IRAN IS SELLING CRUDE OIL
OUTSIDE THE USDOLLAR, WHICH UPSETS THE US-BRITISH
EMPIRE. $$$

Iran is not Iraq
or Afghanistan.
The nation of Iran
has 72 million people and a land mass greater
than three times that of Alaska. It has three times the population of Iraq,
and would be impossible to control from the
interior. Its terrain is far more mountainous
than Iraq,
again a factor in any war maneuver. The alliance
with Russia for Sunburn and Onyx missiles makes Iran a more formidable threat,
as it can defend itself. Many military analysts
believe in the first days of a war with Iran,
the USMilitary would
suffer a shocking loss of an aircraft carrier
group, with thousands of sailors lost. Such
view is widely held.

Not
that Iraq
has been controllable by the USMilitary
efforts. History repeats itself in Middle
East policy. The accusations against Iran
tend to be short clips, flippant remarks,
and base accusations with absurd superficiality
attached. Few seem to realize that USGovt
efforts destroyed democracy in Iran
in 1953, as Mosaddegh
was deposed and the Shah of Iran was installed,
called Operation Ajax. The Peacock Throne
permitted broad Western oil firm investment
and cooperation until he was in turn deposed.
Shah Reza Pahlavi held power for 26 years
as the Iranian people forced to suffer under
his murderous CIA-trained and supported SAVAK
secret police. They extended their reach into
Western Europe on a routine basis, murdering
Iranian citizens seeking sanctuary like in
Germany.
The blowback climaxed with the mullahs and
ayatollah assuming their own clerical fascism,
a direct response to American interference.
That interference continues.

The
USMilitary working with the USDept
Treasury is attempting to economically strangle
the nation of Iran, and to isolate them
from every other country in the region. The USGovt attempts to take punitive measures against
any nation doing business with Iran
or its banks. The USMilitary
floods Iran from the northern border
with heroin, often distributed free, sometimes
subsidized, in order to dull the senses of
the Iranian nation. This seems like terrorism
on its many faces. Past projects have been
to cut vital communication lines on the Persian
Gulf floor, in order to disrupt Iran. The United
States strives to force
the world to take the USDollar
currency for the oil in Iran.
The US
spends more on defense, offense, and military
activity than the rest of the world combined.
The best estimate shows Iran
spends 0.8% of what the US
and its Allies spend on defense. The Tehran
threat is to augment the undercut on the USDollar,
little more. Collateral damage to the entire
Iran
sanctions project is with Israel,
which has been running a public and private
conflict with the US for several months. The
blowback (always to be seen) will be to further
isolate and erode the strength and acceptance
of the USDollar
itself. Damage to the USEconomy
will be vast. The Iran
sanctions have done more to encourage a global
alternative to the USDollar, a movement led by China, than any single action in 20 years.

A
seemingly endless stream of unchallenged statements
made by politicians and financial leaders
contains many media reports awash in misleading
narratives, incomplete histories, and outright
fiction about Iran and its nuclear program. The American public
has a history of being easily manipulated,
like that Saddam Hussein had weapons of mass
destruction. Nothing was learned, as the same
ploy is repeated on a still dullard US population. Either they are dumber than 2003
or do not care, both an indictment aimed at
their cerebral powers. If the US enters a
hot war with Iran, it is likely to be shocked
by the much bloodier, much costlier, and more
fierce defense than over-running the helpless
Iraqis defenses in the famed Shock & Awe
of a Third World nation. The comedy in
the US press back in 2003 included a false story of
recovered yellow painted bricks, immediately
following the actual theft of the entire Iraqi
central bank gold supply by the US Intelligence agencies. A contact in Costa
Rica named Brian told
me his personal on the ground account, as
employee for Halliburton, given in detail.
The disastrous effects of the $3 trillion
Iraqi War against imaginary Islamic extremists
and Al Qaeda boogeymen
continue like economic lifeblood followed
by drivel. Challenge to the propaganda is
obviously regarded as being unpatriotic, a
nazi trait.

Intellectual
self-defense is the way to go, a call to informational
arms. The only way to rebuff and dismantle
propaganda is to be aware of the truth on
which it claims to comment. Jeff Wright of
the Christian Stork offers eight postulates
to counter the propaganda by the fascist US merchants. See the Who What Why article (CLICK
HERE).

1)Iran is not building nuclear weapons. US Intelligence has concluded that Iran has halted its nuclear
weapons program. Several senior Israeli officials
admit that no final decision to build a bomb
has been made by Iran. These findings echo reports from the International
Atomic Energy Agency (IAEA), which has also
concluded that Iran
is not building nuclear weapons. The US deliberately distorts the IAEA report findings
in media accounts. A civilian nuclear energy
production program is not easily converted
into a weapons program. As a signatory to
the Nuclear Non-Proliferation Treaty (NPT),
Iran
is entitled to enrich uranium to low levels
for domestic power consumption and medical
treatment, such as radiation therapy for cancer
patients.

2)Iran is not a threat to the United States. The nation
of Iran
spends 80 times less on defense than the US.
In fact, Iran
spends 5 times less than the amount allocated
by the six sheikdoms of the Gulf Cooperation
Council, the major nations of the Persian
Gulf.

3)Iran is not an existential threat to Israel. Their Defense Minister
Ehud Barak is on record as admitting that
Iran
does not constitute an existential threat
against Israel, as reported by Reuters. Echo the absent
threat perception by Dan Halutz,
former Chief of Staff of the Israel Defense
Forces and Commander of the Israeli Air Force.
Third that position by TamirPardo, Director of the Mossad.

4)The
leadership in Iran
is not fanatical or suicidal. The US General Martin Dempsey, Chairman of the Joint
Chiefs of Staff, regards the Iranian regime
as a rational actor, in his words. The Israeli
Defense Forces Chief of General Staff, Major
General Benny Gantz
seconds the view that the Iranian leadership
is composed of very rational people. The Christian
Science Monitor reported that Israeli Army
Chief doubtsIran will build a
nuclear weapon, as recently as April 2012.
The portrayal of a vicious Iranian theocracy
studded with suicidal regiments is pure bluster.

5)Politicians
and media stenographers have been claiming
Iran is on the verge of developing nuclear weapons
since the mid-1980 decade. The call is repeated
every several years, never proved correct.
Nobody seems to care about the string of errors.
See the USHouse
Republican Research Committee in 1992.

6)The
American and Israeli security establishments
are against any new military front. The US
Secy State Hillary
prefers to watch Iran actions, not words, as
she rejects Netanyahu calls to set red lines
(lines in the sand to defend). Former Internal
Security Chief Yuval Diskin
believes any attack would encourage Iran to develop a bomb all the faster. In other
words, they do not own the bomb now. Former
Mossad Chief Meir Dagan calls any future Israeli Air Force
strike on Iranian nuclear facilities the stupidest
thing he has ever heard, as reported by the
Haaretz.

7)The
American and Israeli people are against any
new military front. In the United States, a poll concluded
that 70% of Americans choose diplomacy over
military force to end any potential Iranian
nuclear ambitions, reported by Christian Science
Monitor. In a Haaretz
poll, 58% of Israelis oppose a unilateral
strike on Iran.
In fact, a similar Haaretz
poll indicated that only 27% of Jewish Israelis
are in favor of a unilateral strike on Iran. Although a majority
of Israelis view Iran
nuclear program as more immediately dangerous
than their American counterparts, polling
indicates they are opposed to a unilateral
strike initiated without American support.

8)An
Iranian nuclear weapon would be assured if
the US or Israel
attack Iran.
The Former CIA Director Michael Hayden within
the Bush Admin stated that even a brief bombing
campaign would guarantee that which we are
trying to prevent, an Iran bent on building a nuclear
weapon. With so much evidence solidly against
their position, US and Israeli hawks have
become increasingly strident in their appeal
to violence as a means of ending the Iranian
nuclear threat. They dominate the news networks,
not reason, and surely without facts. The
Israeli Air Force raid on the Iraqi Osirak
nuclear reactor in 1981 is cited as a precedent
to emulate. The comparison is strained if
not distorted. What is left out is the conclusion
made by US Intelligence, that the 1981 attack
did not stop the Saddam nuclear weapons program.
It accelerated it.

◄$$$
SANCTIONS ARE TAKING THEIR TOLL ON IRAN, THEIR ECONOMY, THEIR SOCIETY. THE IRANIAN
RIAL CURRENCY IS DROPPING LIKE A ROCK. HYPER-INFLATION
HAS HIT IRAN. LOOK OUT ZIMBABWE FOR A RIVAL IN MODERN
HISTORY TO THE WORST INFLATION ON RECORD.
$$$

Using
new data from Iran foreign exchange black market, the national
monthly inflation rate in Iran
has reached almost 70%.
This qualifies as hyper-inflation of the most
viral order. The Rial currency death spiral is wiping out the its purchasing power. Steve Hanke
and Nicholas Krus
of the Cato Institute report that 57 documented
cases of hyper-inflation have occurred in
history. The most recent struck North
Korea in 2009-2011. However,
nothing came close to the devastation in Zimbabwe, where the magnitudes
reached orbit level in the second highest
hyper-inflation ever recorded in the world.
The worst on record is Weimar
Germany
preceding the World War II. See the Zero Hedge
article (CLICK HERE)
and the UK Guardian article (CLICK HERE).

◄$$$
THE SWISS FIRM VITOL HAS CONTINUED TO TRADE
IRANIAN FUEL OIL, SKIRTING SANCTIONS IN DEFIANCE.
THE SWISS GOVT DID NOT SIGN ANY DEAL ON SANCTIONS.
SO FAR NO RETALIATIONS.
$$$

Vitol
is not a household name, but it is the world's
largest oil trader. Vitol continues to
buy and sell Iranian fuel oil, undermining
the US
efforts to choke Iran.
Last month the firm purchased two million
barrels of fuel oil from Iran and sold it
to Chinese traders. The transactions were
confirmed by Reuters interviews with 10 energy industry sources in Southeast Asia, China,
and the Middle East.
A spokesman for Vitol issued a curious statement
that explained its complex circumvention with
a Bahraini subsidiary company and a non-Iranian
counter-party. The Swiss-based Vitol is not
obliged to comply with a ban imposed in July
by the European Union on trading oil with
Iran.
The fiercely independent Swiss Govt did not join the EU and US sanctions against Tehran. The company earlier in the year stopped
trading Iranian crude oil from its main European
offices before the July 1st embargo deadline.
However, they are crafty. They switch off
tanker tracking systems. They transfer cargo
from ship to ship. They blend the oil with
fuel from another source to alter physical
specification. The movement continues.

The
elusive measures taken by Vitol occur under
the guidance of CEO Ian Taylor, a Briton.
He has close ties with the British Prime Minister,
who is a stern critic of Iran
and their mythical multi-lateral nuclear program.
As a result of the European Union ban, the
four largest Iranian oil buyers (China,
India,
Japan, South Korea) have reduced
their imports by at least 20% to avert sanctions.
The backside risk is from insurance coverage.
Vitol uses TicenOcean to store Iranian oil, whose vessels are insured by the North
of England P&I Assn. The EU oil embargo
bans EU insurers who underwrite around 90%
of the world's tanker fleet to cover ships
carrying Iranian oil. So far, Vitol is skipping
along free of insurance cutoffs. See the Yahoo
Finance article (CLICK HERE).

◄$$$
FINGER POINTED CONTINUES AT IRAN
FOR HACKING BIG US-BANKS. THE HAND DOING THE
POINTING IS MORE LIKELY THE US-INTELLIGENCE
AGENCIES. THEY HAVE GONE WILD WITH BANK ROBBERY
ACROSS THE WORLD, INCLUDING THE UNITED STATES.
SET UP FOR NEXT BIG BANK EVENT AND FALSE FLAG
PAINTED. $$$

Nobody
seems to challenge wild accusations and charges
that Iran
is hacking the large US
banks. The charges are being made by the US
Intelligence agencies. When stories fingering
the blame on Iran
for the bank hacking emerge, the news networks
are hardly a source of objective investigation,
since under the dominant thumb of the intelligence
community. My best sources indicate that
the hacking and private account thefts are
being done by the US Intelligence agencies themselves. They
have had numerous successes in the disruption
of Middle East banking systems. They had a leading hand in the Stuxnet
virus injected into the Iran nuclear facility systems, with a strong second
hand by the loyal feisty small ally located
on the Southern Mediterranean.
See the Finance Yahoo article (CLICK HERE).

More
bank hacking has taken place on US shores.
The client account websites of Wells Fargo,
PNC Bank, and US Bancorp were hit by long
drawn out slowdowns in late September of the
same type cyber attacks that hit JPMorgan
Chase and Bank of America in the previous
week. The symptom was unusual and coordinated
high traffic volume designed to slow down
the system. So the event was more like a mudslide
than a robbery. Perhaps it was a test of system
defenses. The lightest volume of delay reports
came for PNC. The result was widespread denial
of service. The origin of the attacks is not
clear, a symptom of their sophistication.
The attacks are part of a larger game that
has turned into a global security arms race.
A group called Izz
ad-din Al qassam
Brigades supposedly claimed responsibility
for the attacks on Bank of America and Chase
last week on PasteBin,
a forum commonly used to boast or threaten.
See the Fox Business article (CLICK HERE).
My personal guess is that with likelihood
under 5% an Islamic outfit did the deed. Naming
an Arab brigade is incredibly easy. They might
have blamed the Easter Bunny or the Grinch
just as easily. It is an insult to one's intelligence.

By
far the leader in this arena is the US Intelligence
agencies, along with the security agency for
the small ally nation on the Southern
Mediterranean. Two different sources inform
the Jackass that the source is Langley and
the CIA, which are preparing to steal US private
accounts with full impunity. They will do
it because they can, and furthermore, they
enjoy the challenge and are having fun, much
like a video game challenge by sick bastards.
The story is that the security agencies are
working on a grand plan to cause a systemic
bank shutdown, during which private accounts
will be stolen, bank holiday will be declared,
and vast restructure will occur, with blame
given to those dastardly mean Islamic guys.
The evil personified is within the US
shores methinks.

##
SAUDI TURMOIL & INSTABILITY

◄$$$
AN ISLAMIC REVOLUTION IN SAUDI
ARABIA IS A SUREFIRE
WAY TO SEND OIL PAST $200 A BARREL. A GERIATRIC
SHAKY ROYAL FAMILY, INTERNAL EXTREMISTS, THE
RISING COST OF LIVING, AND AMPLE INFORMATION
FLOW COMBINE WITH A GROWING POPULATION THAT
USES MORE ENERGY DOMESTICALLY TO MAKE FOR
AN UNSTABLE SITUATION. THESE FACTORS STAND
APART FROM THE RECENT ASSASSINATION OF PRINCE
BANDAR. THE SAUDI REGIME HAS MANY THREATS,
THE BIGGEST BEING THE GROWING DESIRE FOR REFORM
INTERNALLY. THE CROWN PRINCE SALMAN IS MORE
LIKELY TO ESCAPE FOR A MANSION IN SPAIN THAN LEAD THE REFORM
MOVEMENT. THE VICTIM WILL BE THE PETRO-DOLLAR
AND THE CRUDE OIL PRICE, USED AS A WEAPON.
THE LATEST NEWS IS A SHAKEUP INSIDE THE SAUDI
MILITARY. $$$

The
oil world would be shaken to its core by a
revolution in Saudi Arabia. A coming
leadership crisis is becoming all too likely
in the shaky Saudi kingdom. The nation
faces major economic challenges as dramatic
increases in social spending and domestic
fuel consumption devour the innate wealth
of the kingdom. Saudi
Arabia represents the
heart of the Middle East,
which has suffered shocks of instability as
the Arab Spring continues to challenge longstanding
autocratic crusty leadership. A reality check
shows the king and his successors are aging
rapidly and incapacitated in a royal chambers
that is full of competing contenders. The
seculars eye warily the Islamists, who wait
outside the door. Any failed succession battle
in the House of Saud would end up destroying
the regime, ushering in an Islamist age in
Saudi Arabia. The price of
crude oil would shoot to $150 per barrel,
then to $200 per
barrel, maybe higher if radical Islamics
become greedy and wish to show their power.

The
succession to the throne is fraught with problems
and challenges. The geriatric successor would
be both weak and soon ready to pass on. Although
Crown Prince Salman is next in line to the throne, at 76 years of age he
lacks experience. No doubt he would be challenged
by regime opponents. He is next in line, not
because of ability or experience, but because
his older brothers all died. Hardly
a prescription to stabilize the nation under
new assaults. The remaining runt of
the litter is least trained, least educated,
least groomed, least prepared to lead. Saudi
holds the key to the Petro-Dollar, which is
the key to the USDollar.Salman would lack
the energy or savvy to enact significant reforms
necessary to keep the regime in power.

Some
tough endemic problems challenge the world's
biggest oil producer, namely high unemployment,
a corrupt bureaucracy, a crippled economy,
a weak education system, and a society full
of frustrated youth. The Saudi royals kept
the money mostly for themselves in foreign
bank accounts, rather than to lift their society
with education and wide opportunity. The
nastiest theme in the last decade has been
young royals appropriating business property
under threat of imposed illegal taxes or outright
threats, offering 10% of property value to
buy in blatant extortion. The three primary
pillars that have long supported the royal
family are also weakening. 1) Significant
oil revenues, which have long been used to
foster public support, are being depleted
by increased domestic demand. 2) The Wahhabi Islamic establishment that supported the House of
Saud is increasingly fractious and is losing
credibility. 3) And the royal family struggles
to maintain its sturdy facade after losing
two crown princes to old age in recent years.

The
Middle East is in turmoil,
with stress on foreign relations with its
neighbors. Lastly, the Saudi Arabian longstanding
alliance with the United States is in distress, shaky at best and
crumbling at worst. The curious new ingredient
toward instability is the freer flow of information.
No longer can the regime control information,
as the internet connects young Saudis with
the rest of the world. They question the rules
of their society and regime, demanding reform.
See the Safe Haven article (CLICK HERE)
on the summer of Saudi Discontent.

A
quick update, as the Saudi Army has suddenly
done a quick reform to avert an internal revolt.
The USGovt calls it a soft revolution. Things
are moving quickly in Saudi Arabia. This is just
one more signal of the ground shaking in the
sand kingdom. The House of Saud is seeing
its final days. See the PressTV
article (CLICK HERE).

◄$$$
THE CHARADE OF THE SAUDI COVER-UP FOR THE
BANDAR ASSASSINATION CONTINUES. PRINCE BANDAR
WAS ASSASSINATED BY HEZBOLLAH. THE HOUSE OF
SAUD MUST BE VERY TENSE INSIDE, WITH NOBODY
SAFE. THE HOUSE SHAKES BEFORE IT FALLS. WITH
IT WILL GO THE PRIZED PETRO-DOLLAR STANDARD.
THE SAUDI REGIME IS CONCOCTING A NICE STORY
ABOUT A SMOOTH TRANSITION FROM THE DEAD MAN.
A DECEPTIVE TRANSITION APPEARS IN THE WORKS.
$$$

What
a charade is taking place inside Saudi Arabia! The obedient Western press networks
are nowhere to be seen scooping the true story.
The influential and shrewd Prince Bandar
Bin Abdul-Aziz (minister of security) has
been dead well over a month. He was killed
in retaliation for the Syrian royal family
murders. He is being relieved and replaced
in the staid House of Saudi. Next look for
Prince Bandar reported to have died of a heart
attack or slipped with a fatal accident in
his shower, or while entertaining a harem.
It should be noted that he served as Chief
of General Intelligence as well as Secretary
General of the National Security Council.
The drawn out cover-up of Bandar's assassination
shows clearly that no member of Saudi royalty
is safe, that HezBollah
has an extensive reach, that the foundation
of the Petro-Dollar is indeed fragile, and
that the Western press is a pathetic tool
for the Syndicate. See the Tactical Report
(CLICK HERE).

The
Ghost of Prince Bandar is replaced in Saudi
theater. The official statement by the rattled
House of Saud is as follows, "Saudi
King Abdullah issued on October 5, 2012 a
royal decree whereby he relieved Prince Bandar
Bin Abdulaziz of
his position as Deputy Chief of General Intelligence
for Intelligence Affairs and appointed General
Yusef Bin Ali Al-Idrisi as Deputy
Chief of General Intelligence in his place.
The following 501-word report sheds light
on the subject and tells what about the position
of Chief of General Intelligence Prince Bandar
Bin Sultan Bin Abdul-Aziz." A key
error since Bandar was not deputy chief, but
rather chief. Amateur hour
in Riyadh.Keep the deception
going until the royals can relocate elsewhere
in the Persian Gulf,
perhaps even on the Spanish coast for retirement.

Another
official Saudi press release read, "Chief
of the Saudi General Intelligence Prince Bandar
Bin Sultan Bin Abdul-Aziz, who also acts as
Secretary General of the Saudi National Security
Council (NSC), is said to be working to reinforce
the role of his half-brother Prince Salman, who acts as his Assistant for Security and Intelligence
Affairs at the NSC." They are preparing
the stage to announce the passage of security
power to the surviving half brother. Neither
Bandar nor his half brother
are of the geriatric Saudi type. The
top leadership in the House of Saud is aging,
frail, and losing their grip. Since Prince
Bandar was assassinated in August, Saudi Arabia continues to
plant stories that he remains alive. However,
the new Saudi game plan appears to be the
transition to Prince Salman
with Bandar having been removed due to some
yet undetermined incapacity or natural death.
See the Tactical Report (CLICK HERE).